The Pronk Pops Show 1076, May 14, 2018, Story 1: United States Moves and Opens Embassy in City of Truth — Jerusalem, Israel — Death Toll Over 50 In Gaza and Climbing — Videos — Story 2: President Trump Announces Comprehensive Plan To Reduce Drug Prices Through Competition, Incentives, Negotiations, Regulation  and Transparency — Promises Lower Drug Prices — Tough Talk — Follow The Money — Videos — Story 3: Clinton Obama Democrat Criminal Conspiracy Against Trump Using Intelligence Community — CIA, FBI, NSA, and Department of Justice — Failed Attempt To Use Russian Oligarch Oleg Deripaska To Establish Trump Link With Russians/Putin Through Paul Manafort, Former Trump Campaign Manager — Massive Cover-Up and Political Scandal — Video

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Ivanka Trump is pictured unveiling engraved stonework carrying her father's name on the wall at the embassy today

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See the source imageSee the source imageSee the source imageUS President Donald Trump made the decision, which tossed aside decades of precedent, in December as he recognised Jerusalem as Israel's capital 

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Story 1: United States Moves and Opens Embassy in City of Truth — Jerusalem, Israel — Death Toll Over 50 In Gaza and Climbing — Videos

U.S. Embassy opening: Moving is a step towards peace

US Jerusalem embassy opening fallout

A breakdown of the controversy over the new U.S. embassy in Jerusalem

Deadly clashes on Israel border ahead of U.S. Embassy opening

How are Palestinians reacting to the U.S. embassy in Jerusalem and violence in Gaza?

U.S. Embassy opens in Jerusalem, while Palestinian protesters are killed

Thank You President Trump’ on Walls of Jerusalem on Eve of Embassy Move

 

“Thank You President Trump.” That was the message projected onto the ancient walls of Jerusalem, together with the American and Israeli flags, on the eve of the formal transfer of the U.S. embassy to Jerusalem on Sunday evening.

Inside those walls — most recently rebuilt by the Ottoman sultan Suleiman I in the 16th century — tens of thousands of young Israelis danced and sang at the Western Wall plaza in honor of Yom Yerushalayim (“Jerusalem Day”), the 51st anniversary of the reunification of the city during the Six Day War of 1967.

This year, due to the peculiar nature of the Hebrew calendar — which combines both lunar and solar elements — the Hebrew date of Jerusalem Day fell one day before the Roman date of Israel’s 70th anniversary on May 14.

May 14 is also the 70th anniversary of the date that U.S. President Harry S. Truman recognized Israel, which is the reason the embassy transfer was scheduled for that date. (Israel celebrates its Independence Day according to the Hebrew calendar, which fell in April this year.)

 

The coincidence of Jerusalem Day and the embassy move — plus Israel’s victory early Sunday morning in the Eurovision Song Contest — meant that the city has been in a state of celebration for several days, culminating in the dedication of the embassy move on Monday afternoon at 4:00 p.m. local time (9:00 a.m. EDT and 6:00 a.m. PDT in the U.S.).

 

An official in Israel’s Ministry of Foreign Affairs told Breitbart News at a reception Sunday evening that the mood in his department was “somewhere between ecstatic and euphoric.”

In the modern center of the city, American flags and Israeli flags hung side-by-side, along with signs thanking President Trump and declaring him a “Friend of Zion.”

“Trump is Number One!” shouted one Israeli to Breitbart News reporters on the scene. It was a sentiment widely shared in a country that has seen so much hardship and struggle, and which feels that it finally has a friend in the White House — “the best friend Israel ever had,” as one Israeli put it.

The mood was even reflected in Israeli sports. Beitar Jerusalem, the local soccer team, officially renamed itself Beitar “Trump” Jerusalem in honor of the U.S. President.

Trump supporters also took out a massive wrap-around ad in the Jerusalem Post on Monday morning thanking President Trump for delivering on his promises to recognize Jerusalem as Israel’s capital, to move the U.S. embassy to Jerusalem, and to end the Iran nuclear deal.

Across Israel, there was the repeated refrain: “He does what he says.”

Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He was named to Forward’s 50 “most influential” Jews in 2017. He is the co-author of How Trump Won: The Inside Story of a Revolution, which is available from Regnery. Follow him on Twitter at @joelpollak.

http://www.breitbart.com/jerusalem/2018/05/13/thank-president-trump-walls-jerusalem-eve-embassy-move/

 

‘Big day in Israel. Congratulations!’ Trump tweets jubilantly at official opening by Jared and Ivanka of U.S. embassy in Jerusalem – as bloody day of violence sees Israeli snipers kill 52 and injure 2,400

  • US moving embassy from Tel Aviv today after Trump recognised Jerusalem as Israel’s capital in December  
  • Israeli snipers have killed scores of protesters near the Gaza border with more than two thousand injured
  • Mass protests taking place with Palestinian government accusing Israel of committing a ‘terrible massacre’
  • Comes after al-Qaeda chief Ayman al-Zawahiri called for group’s followers to carry out jihad against the US 
  • Russia says embassy move risks increasing Middle East tension as Turkey says US is now ‘part of the problem’ 
  • The Arab League is planning to hold an extraordinary meeting to discuss America’s ‘illegal’ embassy move 
  • US President’s son-in-law and Middle East envoy Jared Kushner said opening showed US could be trusted and that when ‘Trump makes a promise, he keeps it’
  • WARNING: GRAPHIC CONTENT

Donald Trump rededicated the United States’ to its alliance with Israel on Monday as the U.S. embassy in Jerusalem officially opened.

Trump in a video address said that the U.S. will ‘always be a great friend of Israel and a partner in the cause of freedom and peace’ while honoring the nation and the city it claims as its capital as a ‘testament to the unbreakable spirit of the Jewish people.’

‘We extend a hand in friendship to Israel, the Palestinians and to all of their neighbors,’ Trump said in a video address. ‘May there be peace.’

In a tweet shortly after he said, ‘Big day for Israel. Congratulations!’

Neither Trump nor Vice President Mike Pence were there see the realization of their campaign promise that they would relocate the embassy from Tel Aviv and recognize Jerusalem as the capital of Israel. Pence is headlining a celebratory event at the Israeli embassy in Washington, instead.

Jared Kushner and Ivanka Trump, both White House advisers, were part of a delegation of senior officials that included Treasury Secretary Steve Mnuchin that made the trip.

The U.S. delegation had arrived Sunday evening in Jerusalem to mass protests over the foreign policy shift.

Israeli snipers have killed scores of Palestinians and wounded thousands more as 35,000 protesters rallied against the US Embassy opening in Jerusalem overseen by Donald Trump‘s Middle East envoy Jared Kushner and daughter Ivanka.

A 14-year-old was among 52 shot dead along the Gaza border on what is already the deadliest single day in the Israeli-Palestinian conflict since a 2014 war between the Jewish state and Gaza’s Islamist rulers Hamas.

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Ivanka Trump is pictured unveiling engraved stonework carrying her father's name on the wall at the embassy today

The festivities in Jerusalem were a stark contrast to the bloodshed on the Gaza border

Flashpoint: Tens of thousands of Palestinians gathered for protests against the US embassy opening today and dozens were killed amid clashes with Israeli troops. Crowds are seen sprinting away from tear gas during a clash with Israeli security forces east of Jabalia near the Gaza border

Flashpoint: Tens of thousands of Palestinians gathered for protests against the US embassy opening today and dozens were killed amid clashes with Israeli troops. Crowds are seen sprinting away from tear gas during a clash with Israeli security forces east of Jabalia near the Gaza border

Israeli leaders and a U.S. delegation including Treasury Secretary Steven Mnuchin and President Donald Trump's daughter and son-in-law, Ivanka Trump (pictured) and Jared Kushner, have attended the opening of the embassy, relocated from Tel Aviv to Jerusalem in a controversial decision

Donald Trump's daughter Ivanka (right) and husband Jared Kushner (left) joined Benjamin Netanyahu for the opening of the embassy this afternoon

Donald Trump’s daughter Ivanka (right) and husband Jared Kushner (left) joined Benjamin Netanyahu for the opening of the embassy this afternoon

White House senior advisor Ivanka Trump (right) speaks alongside US Treasury Secretary Steven Mnuchin during the opening ceremony

White House senior advisor Ivanka Trump (right) speaks alongside US Treasury Secretary Steven Mnuchin during the opening ceremony

A child who has been affected by tear gas is rushed to medics at the border fence with Israel as mass demonstrations continue along the Gaza border todayA child who has been affected by tear gas is rushed to medics at the border fence with Israel as mass demonstrations continue along the Gaza border today
A protester screams in agony as he is picked up by fellow Palestinians during deadly clashes along the Gaza border today. The death toll continued to climb this morning as anger mounted over the US embassy opening in Jerusalem

A protester screams in agony as he is picked up by fellow Palestinians during deadly clashes along the Gaza border today. The death toll continued to climb this morning as anger mounted over the US embassy opening in Jerusalem

Palestinian protesters carry an injured man who was shot by Israeli troops during a protest at the Gaza Strip's border with Israel today

Palestinian protesters carry an injured man who was shot by Israeli troops during a protest at the Gaza Strip’s border with Israel today

An elderly Palestinian man falls to the ground amid reports he had been shot by Israeli troops during a deadly protest at the Gaza Strip's border

An elderly Palestinian man falls to the ground amid reports he had been shot by Israeli troops during a deadly protest at the Gaza Strip’s border

Huge crowds of protesters hid behind clouds of smoke from burning tyres but at times were forced to run from tear gas fired by Israeli troops

A Palestinian throws a rock in response to Israel's intervention during a protest to mark 70th anniversary of Nakba, also known as Day of the Catastrophe in 1948 and against the decision to relocate the US Embassy from Tel Aviv to Jerusalem

At least 2,400 more have been injured with hundreds of them by live bullets, according to Gaza officials as the Palestinian government accused Israel of committing a ‘terrible massacre’ and Amnesty International called the bloodshed an ‘abhorrent violation’ of human rights.

Trump President tossed aside decades of precedent when he recognized the city as Israel’s capital in December – a decision that sparked global outcry, Palestinian anger and exuberant praise from Israelis.

Russia said today it feared the embassy opening would increase tension in the Middle East while Turkey’s President Tayyip Erdogan warned the US it had forfeited its role as a mediator in the region and was now ‘part of the problem rather than the solution’.

As deadly clashes continued, Trump said in a video address aired at the opening that the embassy has been a ‘long time coming’ and that the U.S. had ‘failed to acknowledge the obvious’ for many years. He added that ‘today, we follow through on this recognition’ and that the new embassy was opening ‘many, many years ahead of schedule.’

Trump also said his ‘greatest hope’ is for peace and that he ‘remains fully committed to facilitating a lasting peace agreement’. His on-in-law Jared Kushner said the opening showed the US could be trusted and that ‘when President Trump makes a promise, he keeps it’.

The UN High Commissioner for Human Rights said the international community must bring those responsible to justice, in a post on Twitter.

‘Shocking killing of dozens, injury of hundreds by Israeli live fire in #Gaza must stop now,’ Zeid Ra’ad al Hussein wrote in a message carried on the UN human rights Twitter account.

‘The right to life must be respected. Those responsible for outrageous human rights violations must be held to account. The int’l community needs to ensure justice for victims.’

A wounded Palestinian woman is evacuated by men wearing gas masks and high-viz jackets as protests turned violent today

A wounded Palestinian woman is evacuated by men wearing gas masks and high-viz jackets as protests turned violent today

Palestinian protesters carry the wounded during clashes near the border with Israel in the east of Gaza Strip

Palestinian protesters carry the wounded during clashes near the border with Israel in the east of Gaza Strip

Israel's armed forces had warned anyone approaching the fence would be risking their lives. By early this afternoon 37 protesters had been killed and the death toll has now risen further

Israel’s armed forces had warned anyone approaching the fence would be risking their lives. By early this afternoon 37 protesters had been killed and the death toll has now risen further

A medic tries to hold an injured man's mouth open as they take him away from the clashes in a stretcher 

A medic tries to hold an injured man’s mouth open as they take him away from the clashes in a stretcher

A wounded female Palestinian demonstrator is evacuated on a stretcher by emergency workers at Qalandya checkpoint near the West Bank city of Ramallah

A wounded female Palestinian demonstrator is evacuated on a stretcher by emergency workers at Qalandya checkpoint near the West Bank city of Ramallah

A woman appears to be giving protesters medical assistance as she tends to them while they sit on the ground during clashes along the border with Israel

Protesters used a horse and cart as they carried wounded Palestinians away from the conflict this afternoon as it emerged at least 37 had been killed and hundreds more injured

Protesters used a horse and cart as they carried wounded Palestinians away from the conflict this afternoon as it emerged at least 37 had been killed and hundreds more injured

Inside the event, the president’s daughter delivered an official welcome telling attendees after her father’s video address: ‘On behalf of the 45th President on [sic] the United States of America, we welcome you officially and for the first time to the Embassy of the United States here in Jerusalem, the capital of Israel. Thank you.’

She joined Mnuchin in unveiling the embassy seal and plaque commemorating her father’s involvement in the occasion.

Her husband, Jared, delivered a rare speech at the embassy opening, as well, in some of his most lengthy public remarks since joining his father-in-law’s administration.

Acknowledging his wife in his remarks, he said, ‘Ivanka, thank you for all the great work you do to help so many people in our country and throughout the world — including me, so I love you.’

‘I am so proud to be here today in Jerusalem, the eternal heart of the Jewish people, and I am especially honored to be here today as a representative of the 45th President of the United States, Donald J. Trump,’ he said.

Highlighting Trump’s decision last week to leave the Iran nuclear agreement and the pledge he fulfilled in moving the embassy, Kushner said, ‘While presidents before him have backed down from their pledge to move the American embassy, once in office this president delivered. Because when President Trump makes a promise, he keeps it.’

‘The United States is prepared to support a peace agreement in every way that we can,’ he told the audience. ‘We believe that it is possible for both sides to gain more than they give.’

Kushner said the U.S. ‘recognizes the sensitivity’ around Jerusalem, home to three religions, including Islam.

‘While the challenges to peace are numerous, I have personally seen that the determination of the leaders throughout the region and throughout the world remains steadfast,’ Trump’s chief peace negotiator said.

At the White House, Deputy Press Secretary Raj Shah blamed Hamas for the violence in Israel on Monday. He said he did not believe that the violence would undermine the United States’ positioning on a peace agreement.

‘The responsibility for these tragic deaths rests squarely with Hamas. Hamas is intentionally and cynically provoking this response,’ he asserted.

Shah demanded that Hamas stop its ‘cynical exploitation of the situation’ that has lead to the deaths.

The president’s spokesman said that embassy opening is ‘about following through on what the President promised and believes.

‘I think we’ve for decades you know walked on eggshells, pretending that Jerusalem isn’t the capital of Israel when it obviously is. And this is just a recognition of reality.’

Shah said the ‘peace plan will be brought forward at the appropriate time, and it can be evaluated on its merits.

‘We don’t think it impact the peace plan,’ he said of the deaths in Gaza.

Palestinians carry an injured protestors to safety as one man kneels on the ground holding his head as violence erupted on the Gaza strip today

Palestinians carry an injured protestors to safety as one man kneels on the ground holding his head as violence erupted on the Gaza strip today

A severely injured man is carried. Israel's armed forces had warned anyone approaching the fence would be risking their livesA severely injured man is carried. Israel’s armed forces had warned anyone approaching the fence would be risking their lives
American and Israeli delegations have begun a festive ceremony to mark the opening of the new U.S. Embassy (pictured) in Jerusalem. U.S. Ambassador David Friedman welcomed the crowd. 'Today we open the United States embassy in Jerusalem Israel,' he said to warm applause.

American and Israeli delegations have begun a festive ceremony to mark the opening of the new U.S. Embassy (pictured) in Jerusalem. U.S. Ambassador David Friedman welcomed the crowd. ‘Today we open the United States embassy in Jerusalem Israel,’ he said to warm applause.

Israeli soldiers walk amidst smoke from a fire in a wheat field near the Kibbutz of Nahal Oz, along the border with the Gaza Strip today

A wounded Palestinian women is carried from the border fence with Israel as mass demonstrations continue following the decision to move the US embassy from Tel Aviv to Jerusalem

A wounded Palestinian women is carried from the border fence with Israel as mass demonstrations continue following the decision to move the US embassy from Tel Aviv to Jerusalem

A group of Palestinian men carry their injured friend to an ambulance by stretcher during clashes with Israeli soldiers

A group of Palestinian men carry their injured friend to an ambulance by stretcher during clashes with Israeli soldiers

‘President Trump, by recognizing history, you have made history,’ he said, in forceful remarks. ‘Today, the embassy of the most powerful nation on earth, our greatest ally, the United States of America, today its embassy opened here.’

Netanyahu firmly declared: ‘We are in Jerusalem, and we are here to stay.’

‘Thank you, President Trump, for having the courage to keep your promises.’

Netanyahu made a reference to the conflict on the Gaza border as he said in his speech that ‘our brave soldiers are protecting the borders of Israel as we speak, we salute them all.’

‘The truth is that Jerusalem has been and always will be the capital of the Jewish people, the capital of the Jewish state,’ he said.

President Trump said earlier on Monday that it would be ‘a great day for Israel’ as the U.S. embassy prepared to open in Jerusalem.

‘The United States remains fully committed to precipitating a lasting peace agreement,’ he said in a video address.

He steered clear of the controversy over the relocation of the embassy, while noting, ‘We continue to support the status quo at Jerusalem’s holy sites, including at the Temple Mount.’

‘Today also demonstrates American leadership. By moving our embassy to Jerusalem, we have shown the world once again that the United States can be trusted,’ he said.

‘We stand with our friends and our allies, and above all else, we’ve shown that the United States of America will do what’s right,’ he said.

Israeli Prime Minister Benjamin Netanyahu and his wife Sara were among those attending the opening ceremony today

Israeli Prime Minister Benjamin Netanyahu and his wife Sara were among those attending the opening ceremony today

Ivanka Trump's husband Jared Kushner was among the speakers as the embassy was officially opened this afternoonIvanka Trump’s husband Jared Kushner was among the speakers as the embassy was officially opened this afternoon

Jared Kushner embraces both his wife, Ivanka

Jared Kushner embraces Israeli leader Benjamin Netanyahu during the opening ceremony today

Jared Kushner embraces both his wife, Ivanka (left) and Israeli leader Benjamin Netanyahu (right) during the opening ceremony today

A ceremony to inaugurate the US embassy in Jerusalem has started with Jared Kushner and his wife Ivanka Trump (centre), both top aides to President Donald Trump, attending. The event took place as Palestinian officials claimed 37 protesters had been killed in a 'massacre' along the Gaza border

A ceremony to inaugurate the US embassy in Jerusalem has started with Jared Kushner and his wife Ivanka Trump (centre), both top aides to President Donald Trump, attending. The event took place as Palestinian officials claimed 37 protesters had been killed in a ‘massacre’ along the Gaza border

As deadly clashes continued this afternoon, Trump said in a video address aired at the opening that the embassy in has been a 'long time coming'. His daughter Ivanka as pictured walking ahead of US Treasury Secretary Steven Mnuchin at the ceremony today

As deadly clashes continued this afternoon, Trump said in a video address aired at the opening that the embassy in has been a ‘long time coming’. His daughter Ivanka as pictured walking ahead of US Treasury Secretary Steven Mnuchin at the ceremony today

Ivanka Trump smiles as she poses for photographs next to engraved stonework carrying the name of her father, US President Donald Trump

Ivanka Trump smiles as she poses for photographs next to engraved stonework carrying the name of her father, US President Donald Trump

Ivanka shared two photos of herself and Jared sharing a meal with GOP Senators Ted Cruz, Mike Lee, Dean Heller, and Lindsey Graham

Ivanka shared two photos of herself and Jared sharing a meal with GOP Senators Ted Cruz, Mike Lee, Dean Heller, and Lindsey Graham

Israel's prime minister Benjamin Netanyahu (pictured) has said Jerusalem will always be the "eternal, undivided" capital of Israe

Israel’s prime minister Benjamin Netanyahu (pictured) has said Jerusalem will always be the ‘eternal, undivided’ capital of Israe

The embassy opening coincides with the 70th anniversary of the founding of Israel.

Trump in December announced that he would follow through on the pledge to move the embassy that U.S. presidential candidates have repeatedly made and then reneged on.

The Republican president said he would ‘move the American embassy to the eternal capital of the Jewish people, Jerusalem’ in keeping with a decades-old U.S. mandating the relocation.

Presidents have typically signed a waiver every six months to skirt the requirement. Trump signed it his first year in office.

After a process that was expected to take up to four years, the U.S. said it would outfit a consulate in Jerusalem as an embassy while a new one is constructed.

‘We extend a hand in friendship to Israel, the Palestinians and to all of their neighbors’: President Trump celebrates the opening of U.S. embassy in Jerusalem from afar

Donald Trump said it was ‘a great day for Israel’ on Monday as the U.S. embassy was officially declared open in Jerusalem.

‘We extend a hand in friendship to Israel, the Palestinians and to all of their neighbors,’ Trump said in a video address.

It has been a ‘long time coming’, he added.

Trump said that the U.S. had ‘failed to acknowledge the obvious’ for many years, adding that ‘today, we follow through on this recognition.’

Trump added that the new embassy was opening ‘many, many years ahead of schedule.’

The embassy move has enraged the Palestinians. Trump said he remained committed to ‘facilitating a lasting peace agreement.’

Trump said the opening of the US embassy in Jerusalem had been a 'long time coming' as he spoke in a pre-recorded video message 

Trump said the opening of the US embassy in Jerusalem had been a ‘long time coming’ as he spoke in a pre-recorded video message

Trump stressed a close bond with Israel. He also said he was ‘extending a hand of friendship to Israel, the Palestinians and to all of their neighbors.’

Neither Trump nor Vice President Mike Pence were there to see the realization of their campaign promise that they would relocate the embassy from Tel Aviv and recognize Jerusalem as the capital of Israel.

Pence is headlining a celebratory event at the Israeli embassy in Washington, instead.

Jared Kushner and Ivanka Trump, both White House advisers, were part of a delegation of senior officials that included Treasury Secretary Steve Mnuchin that made the trip.

Ivanka Trump, in an official welcome, after her father’s video address, told attendees: ‘On behalf of the 45th President on [sic] the United States of America, we welcome you officially and for the first time to the Embassy of the United States here in Jerusalem, the capital of Israel. Thank you.’

Jared Kushner delivered a rare speech at the embassy opening, highlighting Trump's decision last week to leave the Iran nuclear agreement and the pledge he fulfilled in moving the embassy

Jared Kushner delivered a rare speech at the embassy opening, highlighting Trump’s decision last week to leave the Iran nuclear agreement and the pledge he fulfilled in moving the embassy

Acknowledging his wife, Kushner said, 'Ivanka, thank you for all the great work you do to help so many people in our country and throughout the world - including me, so I love you'

Acknowledging his wife, Kushner said, ‘Ivanka, thank you for all the great work you do to help so many people in our country and throughout the world – including me, so I love you’

Kushner delivered a rare speech at the embassy opening, as well, highlighting Trump’s decision last week to leave the Iran nuclear agreement and the pledge he fulfilled in moving the embassy.

‘While presidents before him have backed down from their pledge to move the American embassy, once in office this president delivered. Because when President Trump makes a promise, he keeps it,’ Kushner said.

Acknowledging his wife, Kushner said, ‘Ivanka, thank you for all the great work you do to help so many people in our country and throughout the world – including me, so I love you.’

The U.S. delegation arrived Sunday evening in Jerusalem to mass protests over the U.S. foreign policy shift.

Secretary of State Mike Pompeo did not make the trip, either, but said Sunday in an interview that aired on Fox News that ‘the American people in that region are secure’ and ‘we are comfortable we’ve taken action that reduces that risk.’

Upon the arrival of the U.S. delegation on Sunday, the president’s daughter and son-in-law, both Jewish, received a blessing from Sephardic Chief Rabbi Yitzhak Yosef.

‘Great to join the friends of Zion for an amazing evening commemorating the dedication of the US Embassy in Jerusalem, Israel,’ Ivanka wrote in a tweet after landing.

The embassy opening coincides with the 70th anniversary of the founding of Israel.

As the ceremony took place this afternoon, the Israeli army revealed that warplanes had struck a Hamas facility in Gaza during bloody protests.

The military said it carried out five airstrikes after militants exchanged fire on three separate occasions with soldiers.

Brigadier General Ronen Manelis turn out by Monday afternoon was about 40,000. He said the army viewed that number as a ‘failure for Hamas.’

He said the army noticed there were more women at the front of the protest than in past rallies and accused Hamas of paying people to protest.

This morning, the Israeli military said troops shot and killed three Palestinians who were trying to place an explosive device by the border fence in Gaza during mass protests.

The shooting in the southern Gaza town of Rafah came as the army said an Israeli aircraft had bombed a Hamas military post in the northern Gaza Strip after Israeli troops came under fire. No Israeli casualties were reported.

Amnesty International called the violence today an ‘abhorrent violation’ of human rights.

‘We are witnessing an abhorrent violation of international law and human rights in Gaza…. This must end immediately,’ the London-based human rights group said on Twitter.

‘This is a violation of international standards, in some instances committing what appear to be wilful killings constituting war crimes,’ Amnesty’s Middle East and North Africa director Philip Luther said in a separate statement.

‘As violence continues to spiral out of control, the Israeli authorities must immediately rein in the military to prevent the further loss of life and serious injuries.’

Amnesty made the statement ‘responding to reports that dozens of Palestinians have been killed’ in the protests over the US embassy move.

At one point the Israeli armed forces used drones to drop tear gas canisters in a bid to disperse the crowds of tens of tousands

At one point the Israeli armed forces used drones to drop tear gas canisters in a bid to disperse the crowds of tens of tousands

The drone could be seen releasing gas canisters during clashes between Palestinians and Israeli forces near the border between Israel and the Gaza strip, east of Jabalia

The drone could be seen releasing gas canisters during clashes between Palestinians and Israeli forces near the border between Israel and the Gaza strip, east of Jabalia

Palestinians were forced to run for safety as the gas canisters containing tear gas were fired from drones overhead today

Palestinians were forced to run for safety as the gas canisters containing tear gas were fired from drones overhead today

Witnesses said Israeli drones had also dropped incendiary materials earlier in the day, setting ablaze tyres that had been collected for use in a planned Gaza border protest.

Witnesses said Israeli drones had also dropped incendiary materials earlier in the day, setting ablaze tyres that had been collected for use in a planned Gaza border protest.

Drones unleashed canisters full of tear gas in the hope of dispersing the huge crowds today. The clashes have left scores dead

Drones unleashed canisters full of tear gas in the hope of dispersing the huge crowds today. The clashes have left scores dead

The drone tactic was deployed as festivities were taking place for the opening of a new US embassy in Jerusalem today

The drone tactic was deployed as festivities were taking place for the opening of a new US embassy in Jerusalem today

The drone tactic was deployed as festivities were taking place for the opening of a new US embassy in Jerusalem today

According to local reports, Israel employed specialist drone racers to drop tear gas

According to local reports, Israel employed specialist drone racers to drop tear gas

‘The rising toll of deaths and injuries today only serves to highlight the urgent need for an arms embargo,’ Luther added.

‘While some protestors may have engaged in some form of violence, this still does not justify the use of live ammunition.’

The European Union’s foreign policy chief is calling on Israel to respect the ‘principle of proportionality in the use of force’.

Federica Mogherini said that all should act ‘with utmost restraint to avoid further loss of life’ and added that ‘Israel must respect the right to peaceful protest.’

At the same time, she insisted that Hamas must make sure demonstrators in Gaza are peaceful and ‘must not exploit them for other means.’

The dramatic scenes today came after al-Qaeda chief Ayman al-Zawahiri last night called for followers to carry out jihad against America.

In a new message, he said America’s decision was evidence that negotiations and ‘appeasement’ have failed Palestinians as he urged Muslims carry out jihad against the United States.

Trump ‘was clear and explicit, and he revealed the true face of the modern Crusade, where standing down and appeasement does not work with them, but only resistance through the call and jihad,’ Zawahiri said, according to a transcript provided by the SITE monitoring agency.

Violence: This was the scene as a man used a sling to hurl rocks towards Israeli forces along the Gaza border today

Violence: This was the scene as a man used a sling to hurl rocks towards Israeli forces along the Gaza border today

In the line of fire: Israeli soldiers are pictured lying in position looking out over the Gaza border 

In the line of fire: Israeli soldiers are pictured lying in position looking out over the Gaza border

The Israeli army responded by throwing tear gas towards protesters, sending huge crowds scattering this afternoon

The Israeli army responded by throwing tear gas towards protesters, sending huge crowds scattering this afternoon

Taking cover: Palestinians throw themselves to the ground as tear gas is hurled towards them during fierce clashes today

Taking cover: Palestinians throw themselves to the ground as tear gas is hurled towards them during fierce clashes today

The celebrations in Jerusalem were a stark contrast to the bloodshed along the Gaza border where tens of thousands of Palestinians protestedThe celebrations in Jerusalem were a stark contrast to the bloodshed along the Gaza border where tens of thousands of Palestinians protested
A Palestinian woman tries to fly a kite during clashes with Israeli forces near the border between the Gaza Strip

A Palestinian woman tries to fly a kite during clashes with Israeli forces near the border between the Gaza Strip

The US moved its embassy in Israel to Jerusalem today after months of global outcry, Palestinian anger and exuberant praise from Israelis. Israeli snipers killed a Palestinian man as protests got underway this morning. Pictured: A protester running past burning tyres

The US moved its embassy in Israel to Jerusalem today after months of global outcry, Palestinian anger and exuberant praise from Israelis. Israeli snipers killed a Palestinian man as protests got underway this morning. Pictured: A protester running past burning tyres

US President Donald Trump made the decision, which tossed aside decades of precedent, in December as he recognised Jerusalem as Israel's capital. Palestinians burned tyres this morning ahead of mass protests at the Gaza border today

A Palestinian demonstrator lies on the ground as smoke billows from burning tyres during clashes with Israeli forces near the border between the Gaza strip and Israel east of Gaza City this morning

A Palestinian demonstrator lies on the ground as smoke billows from burning tyres during clashes with Israeli forces near the border between the Gaza strip and Israel east of Gaza City this morning

The announcement and the opening of the embassy sparked new chaos in Jerusalem, which the Israelis and Palestinians both claim as a holy site.

Still, the Trump administration says it is still charging ahead with a plan to bring peace to the region. A U.S. official told the Washington Free Beacon in advance of the embassy opening that the White House intends to unveil the deal that Trump’s son-in-law has taken a lead role in putting together in the coming months.

‘We’ve been working hard and want to give the plan the best chance for success,’ a senior official told the publication. ‘We want to get a lasting deal that is livable for both parties.’

Secretary of State Mike Pompeo, who was not on the trip and has been the point person for the Trump’s upcoming summit with North Korea, said the Middle East peace process is ‘is most decidedly not dead,’ in spite of the unrest that boiled over on Sunday.

‘We’re hard at work on it. We hope we can achieve a successful outcome there as well,’ he said.

Trump’s National Security Advisor John Bolton said the administration believes the embassy move will enhance the peace process because it’s a recognition of reality.

‘I think it will make it easier. It’s a recognition of reality. If you’re not prepared to recognize that Jerusalem is the capital of Israel and that’s where the American embassy should be, then you’re operating on a completely different wavelength,’ Bolton said.

Kushner likewise said in his speech on Monday at the embassy: ‘When there is peace in this region, we will look back upon this day and remember that the journey to peace started with a strong America recognizing the truth.’

‘I believe peace is within reach, if we dare to believe that the future can be different from the past, that we are not condemned to relieve history, and that the way things were is not how they must forever be,’ he said. ‘It will not be an easy road, and it will be filled with difficult moments and tough decisions, but if we dream big and we lead with courage, we can change the trajectory for millions from hopeless to boundless.’

Medics were seen carrying Palestinian protesters away from the scene on stretchers as violence escalated this morning 

Medics were seen carrying Palestinian protesters away from the scene on stretchers as violence escalated this morning

Dozens have been injured - some of them seriously - by Israeli gun fire, according to Gaza's Health Ministry after the army warned that anyone attempting to approach the security fence would be risking their lives

Dozens have been injured – some of them seriously – by Israeli gun fire, according to Gaza’s Health Ministry after the army warned that anyone attempting to approach the security fence would be risking their lives

Protests intensified on the 70th anniversary of Israel's founding, as loudspeakers on Gaza mosques urged Palestinians to join a 'Great March of Return'. Black smoke from tyres burned by demonstrators rose into the air at the border

Thousands gathered in five spots along the border in protest at the embassy move, while sporadic clashes also erupted with Israeli soldiers

Thousands gathered in five spots along the border in protest at the embassy move, while sporadic clashes also erupted with Israeli soldiers

Thousands of Gaza residents headed toward the border with Israel on Monday, drawing Israeli fire in a potentially bloody showdown as Israel prepared for the festive inauguration of a new U.S. Embassy in contested Jerusalem

Thousands of Gaza residents headed toward the border with Israel on Monday, drawing Israeli fire in a potentially bloody showdown as Israel prepared for the festive inauguration of a new U.S. Embassy in contested Jerusalem

Protesters set tires on fire, sending thick plumes of black smoke into the air at several spots along the border, while the Israeli military said protesters assaulted the border fence

Protesters set tires on fire, sending thick plumes of black smoke into the air at several spots along the border, while the Israeli military said protesters assaulted the border fence

The protest in Gaza was to be the biggest yet in a weekslong campaign against a decade-old blockade of the territory. The march was also directed at the inauguration of the U.S. Embassy in Jerusalem

The protest in Gaza was to be the biggest yet in a weekslong campaign against a decade-old blockade of the territory. The march was also directed at the inauguration of the U.S. Embassy in Jerusalem

The relocation of the embassy from Tel Aviv has infuriated the Palestinians, who seek east Jerusalem as a future capital

The relocation of the embassy from Tel Aviv has infuriated the Palestinians, who seek east Jerusalem as a future capital

Israeli Prime Minister Benjamin Netanyahu tweeted 'what an amazing day! Thank you @POTUS Trump' ahead of the opening

J Street, a liberal advocacy group pursuing Middle East peace, said the Trump administration had hurt the prospects of a deal with the embassy relocation in a scathing Monday statement called it a ‘victory for the far-right agenda of President Trump and Prime Minister Netanyahu – but not for the long-term interests of Israelis, Palestinians or the United States.’

‘This move has only undermined the prospects for peace, exacerbated tensions and undercut US standing as an effective mediator,’ J Street president Jeremy Ben-Ami said. ‘This isn’t policy – it’s pandering to a narrow political base.’

The largest Jewish lobbying organization in the U.S., AIPAC, which has supported the move, noted that it was approved by Congress 1995 in a sweeping vote. It prodded other countries to follow the United States’ lead.

‘America was the first nation to recognize the independence of the Jewish state, and it is particularly appropriate that our country is once again taking the initiative to strengthen our relationship with Israel and its standing in the world. We urge other nations to follow the Unites States’ lead and also locate their embassies in Israel’s capital,’ it said.

Palestinian men carry an injured protester during clashes with Israeli forces near the border between Israel and the Gaza strip, east of Jabalia

Palestinian men carry an injured protester during clashes with Israeli forces near the border between Israel and the Gaza strip, east of Jabalia

A wounded Palestinian demonstrator is evacuated during a protest against U.S. embassy move to Jerusalem and ahead of the 70th anniversary of Nakba, at the Israel-Gaza border in the southern Gaza Strip

A wounded Palestinian demonstrator is evacuated during a protest against U.S. embassy move to Jerusalem and ahead of the 70th anniversary of Nakba, at the Israel-Gaza border in the southern Gaza Strip

Violent clashes erupted along the Gaza Strip's border hours ahead of the controversial opening of the US embassy in Jerusalem on Monday, leaving several Palestinians dead from Israeli fire and hundreds more wounded

Violent clashes erupted along the Gaza Strip’s border hours ahead of the controversial opening of the US embassy in Jerusalem on Monday, leaving several Palestinians dead from Israeli fire and hundreds more wounded

Crowds built throughout the day in the Palestinian enclave less than 60 miles away from Jerusalem and sealed off from Israel by a blockade

Israel's military said 'approximately 10,000 violent rioters are currently assembled in a number of locations along the Gaza Strip border and thousands more are gathered by the tents approximately half a kilometre away from the security fence'

Israel’s military said ‘approximately 10,000 violent rioters are currently assembled in a number of locations along the Gaza Strip border and thousands more are gathered by the tents approximately half a kilometre away from the security fence’

Around 1,000 police officers were being positioned around the embassy for the inauguration. Israel's army said it was almost doubling the number of troops surrounding Gaza and in the occupied West Bank

Around 1,000 police officers were being positioned around the embassy for the inauguration. Israel’s army said it was almost doubling the number of troops surrounding Gaza and in the occupied West Bank

A masked protester holds his hand in the air as he stands in front of burning tyres near the  Gaza-Israel border in Khan Yunis

A masked protester holds his hand in the air as he stands in front of burning tyres near the  Gaza-Israel border in Khan Yunis

By midafternoon, at least 18 Palestinians, including a 14-year-old boy, were killed while over 500 were wounded by Israeli fire, Palestinian health officials said

By midafternoon, at least 18 Palestinians, including a 14-year-old boy, were killed while over 500 were wounded by Israeli fire, Palestinian health officials said

Anger: Protesters torch tyres and wave Palestinian flags amid violent clashes along the Gaza border this morning

Anger: Protesters torch tyres and wave Palestinian flags amid violent clashes along the Gaza border this morning

The date of the inauguration is deeply symbolic to both Israelis and Palestinians. The US said it chose the day to coincide with the 70th anniversary of Israel's establishment

The date of the inauguration is deeply symbolic to both Israelis and Palestinians. The US said it chose the day to coincide with the 70th anniversary of Israel’s establishment

Security has been tightened around Jerusalem ahead of the embassy opening this afternoon. Pictured: A road leading to the embassy

Security has been tightened around Jerusalem ahead of the embassy opening this afternoon. Pictured: A road leading to the embassy

As tensions mounted today, the Arab League said it will hold emergency talks on Wednesday to discuss Washington’s ‘illegal’ decision.

The meeting will focus on ‘ways of countering the illegal decision by the United States to move the embassy to Jerusalem’, the organisation’s deputy secretary general for Palestinian affairs, Saeed Abu Ali, said.

He told reporters the permanent representatives of members of the Cairo-based Arab League would meet ‘at the request of the state of Palestine’.

Police and the Israeli military had planned major security deployments today.

Around 1,000 police officers were positioned around the embassy and surrounding neighbourhoods for the inauguration, said spokesman Micky Rosenfeld.

Israel’s army said it would almost double the number of troops surrounding Gaza and in the occupied West Bank.

Early this morning, witnesses said Israeli drones dropped incendiary materials, setting ablaze tires that had been collected for use in a planned Gaza border protest.

Israeli military spokesman Lt Col Jonathan Conricus said the army had bolstered its front-line forces along the border, but also set up additional 'layers' of security in and around neighbouring communities to defend Israeli civilians in case of a mass breach. He said there had already been several 'significant attempts' to break through the fence

Israeli military spokesman Lt Col Jonathan Conricus said the army had bolstered its front-line forces along the border, but also set up additional ‘layers’ of security in and around neighbouring communities to defend Israeli civilians in case of a mass breach. He said there had already been several ‘significant attempts’ to break through the fence

A Palestinian protester hurls stones at Israeli troops during protests near the Gaza border this morning

A Palestinian protester hurls stones at Israeli troops during protests near the Gaza border this morning

Israelis began celebrating on Sunday, as tens of thousands of marched in Jerusalem, some holding American flags, to mark Jerusalem Day.

The annual event is an Israeli celebration of the ‘reunification’ of the city following the 1967 Six-Day War.

Israel occupied the West Bank and east Jerusalem in 1967 and later annexed east Jerusalem in a move never recognised by the international community.

Beyond the disputed nature of Jerusalem, the date of the embassy move is also key. May 14 marks the 70th anniversary of the founding of Israel.

The following day, Palestinians mark the ‘Nakba’, or catastrophe, commemorating the more than 700,000 Palestinians who fled or were expelled from their homes in the 1948 war surrounding Israel’s creation.

Palestinian protests are planned on both days.

Gaza residents streamed to the border area Monday for what is intended to be the largest protest yet against a decade-old blockade of the territory. Israel's military says it will stop a possible border breach at all costs, warning protesters that they are endangering their lives

Gaza residents streamed to the border area Monday for what is intended to be the largest protest yet against a decade-old blockade of the territory. Israel’s military says it will stop a possible border breach at all costs, warning protesters that they are endangering their lives

Israeli troops firing from across a border fence have shot and wounded two Palestinians as a protest near the Gaza border gets underway

Israeli troops firing from across a border fence have shot and wounded two Palestinians as a protest near the Gaza border gets underway

Near Gaza City, hundreds gathered about 150 yards from the fence. A reporter witnessed two people being shot in the legs

Near Gaza City, hundreds gathered about 150 yards from the fence. A reporter witnessed two people being shot in the legs

Israel's army warned Gaza residents they will be risking their lives if they approach the border with leaflets dropped by jets warning its forces will 'act against every attempt to damage the security fence or harm IDF soldiers or Israeli civilians'. A Palestinian is pictured throwing some of the leaflets in the air

Israel’s army warned Gaza residents they will be risking their lives if they approach the border with leaflets dropped by jets warning its forces will ‘act against every attempt to damage the security fence or harm IDF soldiers or Israeli civilians’. A Palestinian is pictured throwing some of the leaflets in the air

WHY THE US MOVED ITS EMBASSY TO JERUSALEM

The United States opened its new embassy in Jerusalem on May 14, a move that has delighted Israel and infuriated Palestinians.

The opening ceremony was timed to coincide with Israel’s 70th anniversary.

The initiative was driven by President Donald Trump, after he broke last year with decades of US policy by recognizing Jerusalem as the capital of Israel.

Trump said his administration has a peace proposal in the works, and recognising Jerusalem as the capital of America’s closest ally had ‘taken Jerusalem, the toughest part of the negotiation, off the table.’

The US opened its new embassy in Jerusalem on May 14, a move that has delighted Israel and infuriated Palestinians. The initiative was driven by Trump, after he broke last year with decades of US policy by recognizing Jerusalem as the capital of Israel

The US opened its new embassy in Jerusalem on May 14, a move that has delighted Israel and infuriated Palestinians. The initiative was driven by Trump, after he broke last year with decades of US policy by recognizing Jerusalem as the capital of Israel

Israel’s prime minister, Benjamin Netanyahu, celebrated Trump’s decision, but the move upset the Arab world and Western allies.

Palestinian President Mahmoud Abbas called it a ‘slap in the face’ and said Washington could no longer be regarded as an honest broker in any peace talks with Israel.

Initially, a small interim embassy will operate from the building in southern Jerusalem that now houses US consular operations, while a secure site is found to move the rest of the embassy operations from Tel Aviv.

WHY DID TRUMP RECOGNIZE JERUSALEM AS ISRAEL’S CAPITAL, AND ANNOUNCE THE EMBASSY WILL BE MOVED THERE?

There has long been pressure from pro-Israel politicians in Washington to move the embassy to Jerusalem, and Trump made it a signature promise of his 2016 election campaign.

The decision was popular with many conservative and evangelical Christians who voted for Trump and Vice President Mike Pence, many of whom support political recognition of Israel’s claim to the city.

Trump acted under a 1995 law that requires the United States to move its embassy to Jerusalem, but to which other presidents since then – Bill Clinton, George W. Bush and Barack Obama – consistently signed waivers.

WHY DOES JERUSALEM PLAY SUCH AN IMPORTANT ROLE IN THE MIDDLE EAST CONFLICT?

Religion, politics and history.

Jerusalem has been fought over for millennia by its inhabitants, and by regional powers and invaders.

It is sacred to Judaism, Christianity and Islam, and each religion has sites of great significance there.

Israel’s government regards Jerusalem as the eternal and indivisible capital of the country, although that is not recognised internationally. Palestinians feel equally strongly, saying that East Jerusalem must be the capital of a future Palestinian state.

The city even has different names. Jews call it Jerusalem, or Yerushalayim, and Arabs call it Al-Quds, which means ‘The Holy’.

But the city´s significance goes further.

At the heart of the Old City is the hill known to Jews across the world as Har ha-Bayit, or Temple Mount, and to Muslims internationally as al-Haram al-Sharif, or The Noble Sanctuary. It was home to the Jewish temples of antiquity but all that remains of them above ground is a restraining wall for the foundations built by Herod the Great. Known as the Western Wall, this is a sacred place of prayer for Jews.

Within yards of the wall, and overlooking it, are two Muslim holy places, the Dome of the Rock and Al-Aqsa Mosque, which was built in the 8th century. Muslims regard the site as the third holiest in Islam, after Mecca and Medina.

The city is also an important pilgrimage site for Christians, who revere it as the place where they believe that Jesus Christ preached, died and was resurrected.

WHAT IS THE CITY’S MODERN HISTORY AND STATUS?

In 1947, the United Nations General Assembly decided that the then British-ruled Palestine should be partitioned into an Arab state and a Jewish state. But it recognized that Jerusalem had special status and proposed international rule for the city, along with nearby Bethlehem, as a ‘corpus separatum’ to be administered by the United Nations.

That never happened. When British rule ended in 1948, Jordanian forces occupied the Old City and Arab East Jerusalem. Israel captured East Jerusalem from Jordan in the 1967 Middle East war and annexed it.

In 1980 the Israeli parliament passed a law declaring the ‘complete and united’ city of Jerusalem to be the capital of Israel. But the United Nations regards East Jerusalem as occupied, and the city’s status as disputed until resolved by negotiations between Israel and the Palestinians.

DOES ANY OTHER COUNTRY HAVE AN EMBASSY IN JERUSALEM?

In March Guatemala’s president, Jimmy Morales, said that his country will move its embassy from Tel Aviv to Jerusalem on May 16, two days after the US move.

Netanyahu said in April that ‘at least half a dozen’ countries were now ‘seriously discussing’ following the US lead, but he did not identify them.

In December, 128 countries voted in a non-binding UN General Assembly resolution calling on the United States to drop its recognition of Jerusalem as Israel´s capital. Nine voted against, 35 abstained and 21 did not cast a vote.

WHAT IS LIKELY TO HAPPEN NEXT? HAS JERUSALEM BEEN A FLASHPOINT BEFORE?

Since Trump’s announcement there have been Palestinian protests and wider political tensions.

Arab leaders across the Middle East have warned the move could lead to turmoil and hamper US efforts to restart long-stalled Israeli-Palestinian peace talks.

More than 40 Palestinians have been killed by Israeli troops in Gaza during a six-week border protest due to culminate on May 15, the day after the US Embassy move and when Palestinians traditionally lament homes and land lost with Israel’s creation.

Although the clashes have not been on the scale of the Palestinian intifadas of 1987-1993 and 2000-2005, violence has erupted before over matters of sovereignty and religion.

In 1969 an Australian Messianic Christian tried to burn down Al-Aqsa Mosque. He failed but caused damage, and prompted fury across the Arab world.

In 2000, the Israeli politician Ariel Sharon, then opposition leader, led a group of Israeli lawmakers onto the Temple Mount/al-Haram al-Sharif complex. A Palestinian protest escalated into the second intifada.

Deadly confrontations also took place in July after Israel installed metal detectors at the complex’s entrance after Arab-Israeli gunmen killed two Israeli policemen there.

Source: Reuters

Team: The White House advisers attended the inauguration along with other Washington delegates, including US Deputy Secretary of State John Sullivan (third from left in black) and Treasury Mnuchin (center)

Team: The White House advisers attended the inauguration along with other Washington delegates, including US Deputy Secretary of State John Sullivan (third from left in black) and Treasury Mnuchin (center)

A US delegation in Jerusalem includes Trump's daughter Ivanka and her husband Jared Kushner, both White House aides. She posted a picture of the couple on Twitter with Benjamin Netanyahu and his wife Sara as she thanked the Israeli Prime Minister for his hospitality at a welcome reception

White House advisers Jared Kushner and Ivanka Trump reportedly received a blessing from a rabbi who previously compared black people to monkeys

White House advisers Jared Kushner and Ivanka Trump reportedly received a blessing from a rabbi who previously compared black people to monkeys

Israeli Prime Minister Benjamin Netanyahu (left) spoke at a reception welcoming the US delegation attended by both Ivanka and Jared

Israeli Prime Minister Benjamin Netanyahu (left) spoke at a reception welcoming the US delegation attended by both Ivanka and Jared

Ivanka and Jared were seen arriving to a reception for the US delegation. She posted this photo on Instagram

Ivanka and Jared were seen arriving to a reception for the US delegation. She posted this photo on Instagram

Trump ‘feeble minded’ over embassy move, says Iran

Iran has denounced President Donald Trump as ‘feeble-minded’ over Monday’s controversial move of the US embassy to Jerusalem, calling for resistance from the Palestinians and the international community.

‘America has entered a crisis of strategic decision-making that looks at the international arena immaturely and adventurously,’ said parliament speaker Ali Larijani, a key establishment figure, at a conference on the Palestinian situation in Tehran.

‘I believe the current US president is not capable of identifying and judging the long-term consequences of his actions,’ he added.

The United States was due to open its new embassy in Jerusalem — known as Al-Quds in Iran — later on Monday amid widespread Palestinian anger and praise from Israelis.

‘Spur-of-the-moment and uncalculated actions cannot continue in today’s world. Feeblemindness is costly for statesmen and they will eventually have to pay the price,’ Larijani said.

Iran is a key backer of Palestinian militant groups, including Hamas, and opposition to Israel has been a central tenet of its regime since the 1979 Islamic revolution.

Larijani called for an ‘immediate reaction’ from Palestinians, Islamic countries and the international community — including boycotts and official complaints to the United Nations.

The US ‘must not think that such actions… can remain without a response,’ he said

There have already been weeks of protests and clashes along the Gaza border, with 54 Palestinians killed by Israeli fire there since March 30.

No Israelis have been wounded and the military has faced criticism over the use of live fire.

Israel says it only opens fire when necessary to stop infiltrations, attacks and damage to the border fence, while accusing Hamas, the Islamist movement that runs the blockaded Gaza Strip, of seeking to use the protests as cover to carry out violence

Jerusalem’s status is perhaps the thorniest issue in the Israeli-Palestinian conflict.

Israel considers the entire city its capital, while the Palestinians see east Jerusalem as the capital of their future state.

In the decades since 1967, international consensus has been that the city’s status must be negotiated between the two sides, but Trump broke with that to global outrage.

He has argued that it helps make peace possible by taking Jerusalem ‘off the table’, but many have pointed out he has not announced any concessions in return from Israel.

Secretary of State Mike Pompeo on Sunday said the US was ‘hard at work’ on the peace process, which he declared was ‘most decidedly not dead’.

Trump’s initial decision led to a series of protests in various Middle Eastern and Muslim countries.

Meanwhile, Britain has no plans to move its Israel embassy from Tel Aviv to Jerusalem and still disagrees with the U.S. decision to do so, Prime Minister Theresa May’s spokesman said on Monday.

‘The PM said in December when the announcement was first made that we disagree with the U.S. decision to move its embassy to Jerusalem and recognise Jerusalem as the Israeli capital before a final status agreement.

The British embassy to Israel is based in Tel Aviv and we have no plans to move it,’ the spokesman told reporters.

He was speaking on a day when the United States was due to open its embassy in Jerusalem, an event that has led to Palestinian protests.

Israeli gunfire killed two Palestinians and wounded at least 35 other protesters along the Gaza border on Monday, health officials said.

US Treasury Secretary Steven Mnuchin - part of a Washington delegation - this morning posted a photo of himself on Twitter with a plaque dedicating a square outside the new US embassy in Jerusalem

US Treasury Secretary Steven Mnuchin – part of a Washington delegation – this morning posted a photo of himself on Twitter with a plaque dedicating a square outside the new US embassy in Jerusalem

US President Donald Trump made the decision, which tossed aside decades of precedent, in December as he recognised Jerusalem as Israel's capital 

US President Donald Trump made the decision, which tossed aside decades of precedent, in December as he recognised Jerusalem as Israel’s capital

The US is not the first embassy to open in Jerusalem – and won’t be the last

When the United States opens its embassy in Jerusalem on Monday it will be the most high-profile diplomatic inauguration in the holy city, but not the first nor the last.

Several countries, mainly African and Latin American, have previously had their ambassadors based in Jerusalem and some are expected to return.

After the 1973 Yom Kippur war, Ivory Coast, Zaire (now the Democratic Republic of Congo) and Kenya severed relations with Israel in protest and closed the doors of their embassies in Jerusalem.

They later renewed relations but moved their missions to Tel Aviv.

In 1980 Israel enacted a law declaring Jerusalem, including the mainly Palestinian eastern zone, its ‘complete and united’ capital.

The United Nations Security Council branded the move illegal and adopted a resolution calling on ‘those states that have established diplomatic missions at Jerusalem to withdraw such missions’.

A Stars and Stripes flower bed outside the new US embassy compound in Jerusalem

A Stars and Stripes flower bed outside the new US embassy compound in Jerusalem

The Netherlands, Haiti and several Latin American countries complied.

Costa Rica and El Salvador returned to Jerusalem in 1984, but left again in 2006.

In the wake of Trump’s announcement on December 6, some at least are heading back – and Israel is hoping for more.

Guatemalan President Jimmy Morales has said his country’s embassy will move to Jerusalem on May 16, and Paraguay’s foreign ministry said on Wednesday it would follow suit.

The Israeli foreign ministry said in a statement that Paraguayan President Horacio Cartes would attend the opening ceremony, which would take place ‘by the end of the month’.

Romania’s government, supported by the speaker of its parliament, has adopted a draft proposal to move its embassy, which would make it the first European Union member to do so.

But Romanian President Klaus Iohannis, who has frequently clashed with the government, opposes the move in the absence of an Israeli-Palestinian agreement, and has called for Prime Minister Viorica Dancila’s resignation.

On a visit to Jerusalem last month, Dancila acknowledged that at this stage she did not have ‘support of all parties as we would wish’ to carry out the embassy move.

Czech President Milos Zeman has said he too would like to see his country’s embassy transferred to Jerusalem.

He did not reveal any firm plan, however, and the government has only announced the reopening of its honorary consulate in Jerusalem and the establishment of a Czech cultural centre in the city.

On the other side of coin, Japanese Prime Minister Shinzo Abe told Palestinian president Mahmud Abbas his country would not move its Tel Aviv embassy to Jerusalem, official Palestinian media reported.

The EU is sticking firmly to the international community’s decades-long position that sovereignty in Jerusalem can only be decided by negotiations between Israel and the Palestinians.

Shortly after the Trump announcement, Israeli Prime Minister Benjamin Netanyahu travelled to Brussels for talks with EU foreign ministers.

‘I believe that all or most of the European countries will move their embassies to Jerusalem,’ he told them, earning a chilly response from the bloc’s foreign policy head Federica Mogherini.

‘He can keep his expectations for others, because from the European Union member states’ side this move will not come,’ she said.

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See the source image

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Number of People Receiving Medicare (2016): *

Total Medicare beneficiaries

• Aged

• Disabled

 56.8 million

• 47.8 million

•   9.0 million

Part A (Hospital Insurance, HI) beneficiaries

• Aged

• Disabled

 56.5 million

• 47.5 million

•   9.0 million

Part B (Supplementary Medical Insurance, SMI) beneficiaries

• Aged

• Disabled

 52.1 million

• 43.9 million

•   8.2 million

Part C (Medicare Advantage) beneficiaries   17.6 million
Part D (Prescription Drug Benefit) beneficiaries  43.2 million

·        Totals may not add due to rounding.

Medicare Eligibility:

  • Individuals ages 65 and over, who are eligible for Social Security payments
  • Individuals under 65 with a disability, who receive Social Security cash payments
  • People of all ages with end-stage renal disease

Average Benefit per Enrollee (2016):

Total: $12,829

  • Part A: $4,968
  • Part B: $5,558
  • Part D: $2,304

Status of Medicare Trust Funds (2016): *

Medicare Trust Funds (billions): HI (Part A) SMI

(Part B) (Part D)

Total
Assets at end of 2015 $193.8 $68.1   $1.3 $263.2
Total income in 2016

Payroll taxes
Interest
Taxation of Benefits
Premiums
General Revenue/Other

$290.8

$253.5
7.7
23.0
3.3
3.3

 $313.2  $106.2

—– —–
2.1   0
— — —–
72.1   13.8
239.0    92.4

$710.2

$253.5
9.8
23.0
89.1
334.7

Total expenditures in 2016

Benefits
Administrative Expenses

$285.4

$280.5 
     4.9

$293.4  $100.0

$289.5 $99.5 
      3.9     0.5

$678.7

$669.5 
     9.2

Net change in assets $ 5.4   $19.8   $6.3 $31.5
Assets at end of 2016 $199.1 $ 88.0    $7.6 $294.7

*Totals may not add due to rounding

Medicare Part A

Medicare Part A (HI) Financing and Tax Rate:

Financing: Primarily financed by payroll taxes

  • Tax rate paid by employee: 1.45%
  • Tax rate paid by employer: 1.45%
  • Total tax rate paid by both employer-employee: 2.90%
  • Total tax rate paid by self-employed: 2.90%
  • Beginning in 2013, workers pay an additional 0.9 percent of their earnings above $200,000 (for those who file an individual return) or $250,000 (for those who file a joint income tax return)

Medicare Part A Benefits (2018):

Hospital Benefits – Initial deductible: $1,340

– Daily co-insurance:

  • $0 (1st ~ 60th day)
  • $335 (61st ~ 90th day)
  • $670 (91st ~ 150th day, lifetime reserve days)
Skilled Nursing Facility Benefits – Deductible: $0

– Daily co-insurance:

  • $0 (1st ~ 20th day)
  • $167.50 (21st ~ 100th day)
  • – No benefits starting the 101st day
Home Health Services Benefits – No deductible

– 20% of Medicare –approved amount for durable medical equipment

Hospice Benefits – Deductible: $0

– Up to $5 co-payment per prescription for outpatient drugs for pain and symptom management

Medicare Part B

Financing:

  • About 25% by monthly premiums;
  • About 75% from general federal revenues

Medicare Part B Benefits (2018):

Coverage: Physician and outpatient care, medical supplies, home health, and preventive services
Standard Monthly premiums: The standard Part B premium is $134.00. However, most people who receive Social Security benefits will pay less ($130 on average) because Part B premiums increased more than the cost-of-living increase for 2018 Social Security benefits. Monthly premiums have been means-tested since 2007.

If Your Yearly Income in 2016 was You Pay
File Individual Tax Return File Joint Tax Return
$85,000 or below $170,00 or below $134.00
$85,001 – $107,000 $170,001 – $214,000 $187.50
$107,001 – $133,500 $214,001 – $267,000 $267.90
$133,501 – $160,000 $267,001 – $320,000 $348.30
above $160,000 Above $320,000 $428.60
Initial deductible: $183.00
Co-pay: 20% of covered expenses
Penalty for late enrollment : 10% of monthly premium for each full 12 months of late enrollment for life (Exception: late enrollment due to cancellation of an employer-sponsored group insurance)

Medicare Part D

Financing:

• About 13% by monthly premiums;

• About 78% from general federal revenues

• About 9% from state payments and interest

Medicare Part D Benefits (2018):

Coverage: Outpatient prescription drugs
Monthly premiums: The national base beneficiary premium for 2018 is $35.02. As of 2011, monthly premiums are mean-tested.

If Your Yearly Income in 2016 was You Pay
File Individual Tax Return File Joint Tax Return
$85,000 or below $170,00 or below Plan Premium
$85,001 – $107,000 $170,001 – $214,000 $13.00+Plan Premium
$107,001 – $160,000 $214,001 – $320,000 $33.60+Plan Premium
$160,001 – $214,000 $320,001 – $428,000 $54.20+Plan Premium
above $214,000 Above $428,000 $74.80+Plan Premium
Annual deductible $405*
Co-insurance: 25% of drug costs between $405 and $3,750*:
Coverage gap: 44% out-of-pocket spending for generic drug costs between $3,750~$5,000*. A 65% discount is available on covered brand-name prescription drugs at the time of purchase.
Extra help: Benefit for people with income less than $18,210 for an individual ($24,690 for a married couple living together) and up to $14,100 in resources ($28,150 for a married couple).
Note: Individual states might apply different criteria for extra help.
Penalty for late enrollment: 1% of the national average premium for each month not enrolled for life (Exception for late enrollment due to having prescription drug coverage that is as good as Medicare’s).

* Varies by individual plans and indexed to the annual percentage increase in Part D expenditures thereafter.

Supplemental Insurance

Medigap:

  • Each state offers up to 10 standard plans.
  • Starting June 1 2010, plans E, H, I, or J are no longer available to buy. People who already have one of these plans are able to continue with it. Also, Plans M and N are new policies introduced in 2010.
  • 23% of all Medicare beneficiaries have a Medigap policy.

Medicare Savings Programs:

Benefit for dual eligibles (those who qualify for Medicare and Medicaid benefits):

·   20% of Medicare beneficiaries received Medicaid in 2017.

Qualified Medicare Beneficiaries
(QMBs)
– Entitled to Medicare Part A

– Asset test

  • Not exceeding $7,560 for an individual;
  • Not exceeding $11,340 for married couples

– Monthly income limit: Most states: $1,032 for an individual or $1,392 for a couple

– Coverage: Medicare Part A & B premiums, deductibles and coinsurance.

Specified Low-Income Medicare Beneficiaries (SLMBs) – Entitled to Medicare Part A

– Asset test:

  • Not exceeding $7,560 for an individual;
  • Not exceeding $11,340 for married couples

– Monthly income limit: Most states: $1,234 for an individual or $1,666 for a couple

– Coverage: Medicare Part B premiums only

Qualifying Individuals
(QIs)
– Limited number of beneficiaries per year

– Entitled to Medicare Part A

– Asset test:

  • Not exceeding $7,560 for an individual;
  • Not exceeding $11,340 for married couples

– Monthly income limit: Most states: $1,386 for an individual or $1,872 for a couple

– Coverage: Medicare Part B premiums only

Medicaid Only
(Non QMB, SLMB, or QI)
– Entitled to Medicare Part A and/or Part B and are eligible for full Medicaid benefits

– Typically, these individuals need to spend down to qualify for
Medicaid or fall into a Medicaid eligibility poverty group

– Coverage: Full Medicaid benefits, Medicare cost-sharing
liability

Note: Individual states might have less restrictive criteria for dual eligibility.

Medicare Advantage (MA):

  • Eligibility to choose a MA plan: People who are enrolled in both Medicare A and B, pay the Part B monthly premium, do not have end-state renal disease, and live in the service area of the plan.
  • Formerly know as Medicare+Choice or Medicare Health Plans.
  • Benefits are provided by private insurance companies.
  • Premiums, cost sharing, and coverage vary by plan.
  • 18.4 Million enrollees (32% of all Medicare enrollees) in 2016.

http://www.ncpssm.org/our-issues/medicare/medicare-fast-facts/

 

WATCH LIVE: President Trump to discuss lowering drug prices

Trump announces plan to bring drug prices “back down to Earth”

HHS Secretary Alex Azar On President Donald Trump’s Drug Price Plans | CNBC

Trump unveils sweeping plan to lower prescription drug costs

White House press briefing with Sarah Sanders | Friday, 11 May 2018

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Part D Options When You Don’t Take Prescription Drugs

Medicare Part D Stages of Your Journey

Medicaid

HHS Sec. Alex Azar Presents “The Most Comprehensive Attack On Prescription Drug Affordability In History”

Following Friday’s announcement on lowering prescription drug costs, Health & Human Services Secretary Alex Azar explained the president’s new 50-point plan to lower health costs at the White House press briefing:

(You can watch Sarah Sanders answer questions for Friday here)

“There are over 50 actions that we have in — in the blueprint. And this is, again, not one-and-done, OK? We are learning. We are open. We’re hearing. We want to — we want this to be an active, ongoing process. This doesn’t get solved tomorrow. It’s going to take years of restructuring this system, but these are big. They’re bold steps. This is the most comprehensive attack on prescription drug affordability in history by any president,” Azar explained.

Trump’s plan, called “American Patients First,” seeks to increase competition, improve negotiation and create incentives to lower list prices of prescription drugs. It also includes rebate-sharing in Medicare drug plans, promoting generics and copycat versions of drugs and requiring drug manufacturers to publish list prices for drugs in television advertisements.

AZAR: Thank you, Sarah. Good afternoon, everyone. Well, as the president said earlier, we need a system for prescription drug prices that puts American patients first and one that takes case of America’s patients and doesn’t take advantage of them. What I wanted to do was try to just put a frame together for the actions that you’ll see in the blueprint and what the president and I talked about today to – so you just have a sense where we’re going here.

There are four major problems that we face. The first is high list prices for drugs. The second is government rules that get in the way of plans getting good deals for our senior citizens in our Medicare program. The third if foreign countries free riding off of American innovation. And the fourth is high out of pocket costs, especially for our seniors.

So, as you heard from the president today, this administration has already made a lot of progress in this regard. So, in the first year and a half in office the FDA has approved more generic drugs than ever before in history saving $8.8 billion in the first year. We also changed Medicare’s reimbursement rules to bring down the out of pocket spending for senior citizens saving them $320 million out of pocket on the drugs that they buy each year.

That work and the work that we’re laying out now in the president’s blueprint, it’s focused on four strategies to help fix this very complex problem that we face. First, increase competition. Second, increased and better negotiation. Third, incentives to actually lower list prices. And, fourth, lowering out of pocket costs.

So, first, it’s crucial that we have more competition in the prescription drug markets. That means we need a vital and vibrant generic drug industry and generic drug market. We need to foster and nurture a new competitive biosimilar generic drug market. Those are the generics essentially for those really complex, expensive biologic medicines. AZAR: We need to foster and nurture that. We also have to get after pharma companies who engage in anti-competitive practices and try to block the entry of generics or biosimilar products to market by, for instance, blocking access to their product so they can’t do the studies they need to do in order to get approval of an affordable generic or biosimilar market.

So, we’re going to go after all these kinds of abuses. Second, we’ve got to bring more private sector negotiation and better tools to our Medicare program so we get the best deals.

The Part D drug discount program for senior citizens is now 15 years old. I was there when we created it and helped to launch it. And when we did it, it was the — it was — it still is a great program, but it had the best tools, it was the best at negotiating great deals for our senior citizens.

And really was able to drive type formularies that were very efficient, and that’s what’s helped keep the cost of that Part D drug plan down below forecast and constantly low premiums throughout its time. But, over 15 years as so often happens with government programs, it got frozen in place.

And the private sector kept adapting and learning, especially after the economic crisis in 2007 how to control drug spend even better, OK? Part D stayed more static. We need now to bring the same tools that are available to the private sector to those Part D drug plans so they can negotiate better.

We need to unleash them so they can drive great deals for our seniors. We also have another part of our program, a major part which is called Part B. These are the drugs the physician administers. Mentioned those in the Rose Garden.

Those are — these right now are paid basically on a list price plus a markup. They send us a bill, we write a check. There’s no negotiation involved in that at all and the President has proposed in his budget, and we are reemphasizing we have got to figure out ways to move those drugs, especially the high cost ones into the private Part D drug plan negotiations.

So that we can get a deal and start getting bargains on that for our seniors and for taxpayers, we need to look at other mechanisms. And you’ll see that in the blueprint, some other ones that also help us negotiate better deals there for those plans.

Third, and this is a very complex area. Right now we have to bring incentives to lower list drug prices, OK? Right now, every incentive in the system is to increase and have high list drug prices. Because everybody in the system except the patient and the taxpayer is wetting their beak along the way.

They’re getting a — they’re getting a percent of that list price. List price goes up, list price higher, everybody makes more money along the way, so that it’s just — the math just works that way. We need to try to flip the incentives backwards so that financially it makes less sense to increase prices.

So one of the things we’re going to do, the President — I talked about this in the Rose Garden, is that we are having the FDA look at how we can require, in direct to consumer TV ads, that you have to disclose the list price of your drug.

We believe it’s an important part of fair balance, that if you’re telling a patient, activating a patient to have a discussion with their doctor about a drug, telling them all the good things that drug can do for them, it’s material and relevant to know if it’s a $50,000 or a $100 drug.

Because often that patient is going to have to bear a lot of that cost. In addition, we have in Medicaid and Medicare some key incentives that we can turn around on list prices. As part of Obamacare, one of the deals with the pharma industry was capping the statutory rebates on drugs in the Medicaid program at 100 percent.

We are going to work with Congress to look at overturning that cap on rebates. That again will make the math work so that when you increase your list price, it’s going to cost more money if you’re a pharma executive thinking about raising prices. AZAR: We’re also proposing — we want to think about some really creative ideas of — in our programs of reversing those incentives. So right now in our drug discount program, if you have a drug that fits into one of these protected classes, it’s almost impossible for the drug plan to negotiate and get any kind of discount from you, OK?

Well, that’s a — that — everybody gets that. What if, instead, we say, “You only get to be in that protected class if you haven’t raised your list price in the previous 18 months”? What if we say, “You can be exempt from these specialty tiers, where you — where the patient has to pay a lot out of pocket, but only if you haven’t increased your list price in the previous 18 months”? So a lot of tools like that.

The other big area we have to look at is the entire system of rebates that we have with pharmacy benefit managers. We are calling into question today the entire structure of using rebates as the method of negotiating discounts in the pharmacy channel, because right now, every incentive is for the drug company to have a very high list price, and to negotiate rebates down, often in a very nontransparent way.

What if, instead, we said, “No rebates. Flat price, fixed price in the contracts”; take away this whole, what’s called the gross-to-spread that removes that, and makes people indifferent to what the list price is in — in — in that system, and takes away the incentives, where even the pharmacy benefit manager makes money from higher list prices?

We also have a — a real issue that we’ve got a look at, which is the role of compensation for pharmacy benefit managers. They’re taking it now from both sides. They’re getting compensated by their customers, the insurance companies, but they’re also getting compensated by the drug companies they’re supposed to be negotiating against. They’re getting rebates, and keeping some of the rebates. They’re getting administrative fees.

Should we move to a fiduciary model, where the pharmacy benefit manager works for the insurance company or the individual, and only is compensated by the insurance company or individual; forbid renumeration from the — from the pharmaceutical company, so that it’s all completely on one side there, complete alignment of interest?

And then finally, how do we lower out-of-pocket drug costs? Well, as the president talked about it, we’re going to get rid of — we’re going to get rid of these gag rules, OK? Right now, some pharmacy benefit managers are telling pharmacists, “You’re not allowed to tell the patient that if they paid cash for this generic drug, it would be cheaper for you than if you run it through your insurance.” We think that’s unconscionable, and in part D, we’re going to work to — we’re going to work to block that.

We also think it’s a right, that when you’re sitting there with your doctor, you ought to be able to know what your out-of-pocket is for drug you’re going to be prescribed under your precise drug plan, and you ought to have that information. And you ought to have information on what competing drugs are that your doctor’s not prescribing, and what you would pay out-of-pocket for that. And that ought to be across the part B plan, and the part D plan.

Let me give you an example: You’re in with a doctor. This doctor has an infusion clinic, OK, as part of their office. OK, so they write you a drug that might be an infused drug. You might have a $300 co-pay for that. Well, wouldn’t you like to know that if the doctor instead wrote you a self-injectable drug, you’d have a $20 co-pay? And you could at least have an informed discussion. So we think that kind of informed consumer on out-of-pocket will also help drive real savings in the system.

So these are just some of the measures. There are over 50 actions that we have in — in the blueprint. And this is, again, not one-and-done, OK? We are learning. We are open. We’re hearing. We want to — we want this to be an active, ongoing process. This doesn’t get solved tomorrow. It’s going to take years of restructuring this system, but these are big. They’re bold steps. This is the most comprehensive attack on prescription drug affordability in history by any president. And I’m just grateful President Trump is, you know, standing behind us to — and — and encouraging us to do these kind of bold measures.

So with that said, let me open it up to questions.QUESTION: There’s a tremendous number of moving parts in — in this blueprint, many of which will require legislative action. How much of this works without the rest? Do you have to do it all, or can you do just part of it?

And — and how much can be done through executive action versus legislation?

AZAR: That’s a great question. Most of this, we believe, can be done by executive action. Now, we are more than happy to work with Congress on a bipartisan basis, so many of these solutions ought to be attracting bipartisan support. We all acknowledge this. These are problems we have to deal with.

But we believe most of these actions are steps that we can take using our regulatory authorities, especially with the power in the Medicare program.

They are — few of them are interdependent, and so it’s not as if any one is requiring a preceding act, there. We think we can attack many of these steps.

It is complex, though. It is very — because the system is rocket science. It’s unbelievably complex. And this — it is a very sophisticated approach, hitting at so many of the financial and business levers behind the system.

Instead of throwing just sort of political speak at this as — as it would have been easy to do, it’s a very business mindset focus on how do you actually change the underlying financial levers here to genuinely solve the problems?

That’s what the president wants. He wants it to actually solve the problem and lead to results.

QUESTION: Mr. Secretary?

AZAR: Hi.

QUESTION: Mr. Secretary, thank you. How soon will consumers actually see lower drug prices?

AZAR: Yes, so already they’re seeing lower drug prices from that historic level of generic drug approval last year. That’s almost $9 billion a year from all those generics on the market. The cuts that we made on how we reimburse on Medicare drugs, $320 million a year from that already; As we make more of these — we’re going to — we are — we are certainly moving forward with any of these changes to make sure that they’re going to see it in the pocketbook right away.

You know, let’s — so it — it’ll — it’s going to take time. Some of this will take regulatory action. We’ll have to go through the administrative process.

But I can tell you, as soon as I walked out of the Rose Garden — you know what the first question the president and the chief of staff had was?

QUESTION: (Inaudible)?

AZAR: When’s the execution? I want the execution framework. We’re going to have a meeting next week on the timelines and getting it all done.

So there’s…

QUESTION: Is it a matter of weeks or is it months, that consumers could actually see that benefit?

AZAR: It’s — it’s going to be months for the kind of actions that we need to take, here. Again, this is — this is — it took decades to erect this very complex interwoven system.

We’re talking about entrenched market players, complex financial arrangements that have — would have to be redesigned.

So I don’t want to overpromise that, somehow, you know, on Monday, there’s a radical change. But there’s a deep commitment that this is — this is fundamental, structural change that we’re talking about, to — to our system.

QUESTION: Mr. Secretary?

AZAR: Yes?

QUESTION: Mr. Secretary, thank you very much (ph). India is making a lot of jokes (ph). (Inaudible) how India is going to be effected to this (inaudible) today?

Also, at the same time, next month is Yoga International Day announced by the United Nations and the prime minister of India. How yoga can help — maybe you don’t need any drugs if you have yoga?

AZAR: Well, I’ll stick with the first one, which is the generic — which is generic drugs. Generic drugs, competition in our system is absolutely vital. That’s why — deep commitment of the administration to remove any anti-competitive barriers to generic competition.

QUESTION: Mr. Secretary?

AZAR: Yes?

QUESTION: You talked about calling into question the entire rebate structure.

AZAR: Yes.

QUESTION: Specifically what steps are you doing to — now, and when might consumers see change on that?

AZAR: Yes. So as part of the blueprint, we’re releasing a request for information that’s the initiation of seeking input. This is — this is the restructure — this is the possible restructuring of a major sector of the economy.

One doesn’t do that lightly. It’s beginning a national dialogue with the public, with — with stakeholders, with Congress on — if we were to do this, if we were to outlaw rebates, say in the Part D Drug Discount Program, and instead require that the products be discounted at a fixed price.

So, for instance, just to explain how this works now, let’s say you have $1,000 drug. You go to the pharmacy benefit manager and say, hey, if you cover my drug, I’ll give you a 30 percent rebate on that after the fact if any of your patients use this. OK, so a $300 rebate on that.

What this would say is instead of that, you would have to negotiate and the contract would say you get reimbursed $700 this year, and then maybe $702 next year, if — for — for some inflation. So, it’s fixed and indifferent than to list price. So this game — what goes on now is frankly, a bit of a game, which is the drug company negotiates this 30 percent rebate and then, the next day, increases price 30 percent.

And it’s — it’s this game of chase that goes on. Instead, fix price, make everything indifferent to this list price and all the fees not be based on — on a percent of this artificial list price, which for so many people is like the rack rate on the back of your hotel room door. You know, almost nobody pays it. But too many people now in the health care system are paying it, and they’re suffering from that.

QUESTION: But, any timeline for this, like how long it’s going to take, or?

AZAR: Well that’s a — so, this is out today and we’re going to seek comment. And we want to learn. And then we’ll — we’re going to — we’re going to move forward on that if it makes sense. And we need to learn how to restructure — restructure things.

I believe that even one pharmacy benefit manager just yesterday talked about this precise issue of restructuring their contracts to get out of this rebate spread conundrum that the world is in. So I believe it’s doable and I think it will have tremendous systemic impact. Yes.

QUESTION: Mr. Secretary, there are a couple of notorious examples in the last couple of years of drug companies buying drugs that have been on the market for years and suddenly raising their prices extraordinarily.

AZAR: Yes.

QUESTION: Is there anything in this blueprint that addresses that…

AZAR: There is, yes.

QUESTION: … For example, the — the EpiPen situation a couple years ago?

AZAR: There is. So, one of the elements on increasing the power of negotiation that we’re doing in this plan is if a sole-source generic drug — which is what these instances that have gotten so much attention in the past several years, this is when you have one generic drug out there.

And if there is any increase in price by a sole-source generic, we are going to allow the drug plan to reopen their drug formulary immediately and take action against that drug, whereas right now they have to wait the — for the end of the year on the new plan cycle. They can immediately go after that drug, come up with alternative drugs or create preferential treatment for other drugs right away, if there’s any increase in price of a sole-sourced generic.

QUESTION: Mr. Secretary?

AZAR: Yes.

QUESTION: Yes. So you’re talking about the increases in drug prices, while in areas like Maryland and Virginia insurers are talking about double digit health insurance premium increases. There’s a Maryland regulator that’s said something like the ACA is in the death spiral and echoing past words (ph) of the president. What are you doing to deal with that? Does HHS just accept these premium predictions as reality? What are you doing to reduce those costs?

AZAR: So — so, some of these premium submissions right now, it is the very beginning of a process that happens with state regulators around — around those insurance designs. These price increases were happening under President Obama. They continue because of the structural infirmities in how Obamacare was designed.

This is why the president has been so adamant about producing alternative, affordable options for patients because for so many — the 28 million forgotten men and women in this country have been forced out of the individual market. And they’re sitting there without insurance, even though they were promised they would have accessible, affordable, competitive insurance that they could keep.

You know, 6.7 million Americans paid $3.1 billion in the Obamacare taxes for the privilege of not buying insurance they couldn’t afford and didn’t want. And 80 percent of them make $50,000 or less.

So we’re trying to bring short-term plans as an option for people. We’re trying to bring association health plans out of the Labor Department as options for people. The president is just — We want to keep looking for more options to get people out of some of the traps that the — the Obamacare system has created of these high-cost and uncompetitive plans for people.

Yes?

QUESTION: Mr. Secretary, I have a question about another issue at HHS — HHS (ph), actually. Justice Department has indicated the department is set to change an Obamacare rule that would bar medical practitioners from denying mental treatment to transgender people, including gender reassignment surgery. Will HHS repeal that rule?

AZAR: I’m not familiar with that — with that particular issue, so I’m going to — I’m — I’m going to talk about drug price. I’m not familiar with that. I’ll look into that when I get back over to the department. Thank you.

Yes?

QUESTION: Thank you. So you talked about Medicare Part B, negotiating better — better prices. That is same thing that the president referred to when he said that other countries’ socialized Medicare — medicine systems are — are ripping us off. Why is that OK for Medicare, but not for other countries?

AZAR: So the difference is — the difference is having entities negotiate in a competitive environment. So what happens in some of these socialist countries? I dealt with them in the past. What they do is they say, “You don’t come into this country unless you pay this low price, and here’s — here’s a low, below-market, noncompetitive price. You either pay it, or you don’t come into this country.” And they don’t really care if the people of their country don’t get access to that drug, and the people aren’t informed, even, that they don’t have access to that medicine in these — in these ration systems.

And so that’s completely different from what we’re doing, where we’re harnessing the power of the private negotiating market to negotiate deals.

So for instance, the way Part D works, the system that we want to try to emulate and use tools from in that Part B, is one drug plan might say, “I’m not going to cover this drug because I didn’t get a good enough deal,” and then another plan might cover that drug because they think they got a good enough deal. But the key is, the senior citizen’s in the driver’s seat. They get to say, “All right, then I’m going to choose. I need that drug. I’m going to buy this plan, and I’ll pay the premium for that plan, because I want insurance there.”

You know, if you’re in a socialized country, it’s one-size-fits-all. You can’t exit, except gone and — getting on an airplane to America, where you can get access to that medicine.

So yes?

QUESTION: Mr. Secretary, thank you. When people hear about this plan, read about this plan over the upcoming days, they’re presumably going to learn about yourself as well, and they might say, “Wait a minute. Somebody who was a pharma executive is now going to be the one in charge of lowering drug prices.” How is that going to work? Your pitch to Americans, that they can trust you to oversee this effort would be what?

AZAR: I’d say trust us by our actions, and by the deeds in the blueprint: over 50 action plans that are hard-hitting. It’s the hardest-hitting plan ever proposed by a president across the entire spectrum of every player in this industry to drive down drug prices, and make drugs more affordable. And this is exactly — I know this from having been on the other side, running a drug company, in these — and these issues, which is, I actually looked at, if you could lower drug prices. It didn’t work for any one company. You —

This is how perverse the system is: You put yourself at a disadvantage in the system by having a lower-list-price drug than others, again, because every player in the system makes more money as a percent off of that list price. This is precisely why I’m so excited to be here in government, with the knowledge that I’ve got, and this team has about how we can change the rules of the road, and actually change the system, so that we can reverse those incentives to make that work, make those choices work, bring down drug prices, and make things more affordable.

Trump Promises Lower Drug Prices, but Drops Populist Solutions

Image
The plan announced by President Trump and Alex M. Azar II, the secretary of health and human services, on Friday would give private entities more tools to negotiate better deals on behalf of consumers, insurers and employers.CreditTom Brenner/The New York Times

WASHINGTON — President Trump vowed on Friday to “bring soaring drug prices back down to earth” by promoting competition among pharmaceutical companies, and he suggested that the government could require drugmakers to disclose prices in their ubiquitous television advertising.

But he dropped the popular and populist proposals of his presidential campaign, opting not to have the federal government directly negotiate lower drug prices for Medicare. And he chose not to allow American consumers to import low-cost medicines from abroad.

He would instead give private entities more tools to negotiate better deals on behalf of consumers, insurers and employers.

Speaking in the sun-splashed Rose Garden of the White House, Mr. Trump said that a “tangled web of special interests” had conspired to keep drug prices high at the expense of American consumers.Everyone involved in the broken system — the drugmakers, insurance companies, distributors, pharmacy benefit managers and many others — contribute to the problem,” Mr. Trump said. “Government has also been part of the problem because previous leaders turned a blind eye to this incredible abuse. But under this administration we are putting American patients first.”

His proposals hardly put a scare into the system he criticized.

Ronny Gal, a securities analyst at Sanford C. Bernstein & Company, said the president’s speech was “very, very positive to pharma,” and he added, “We have not seen anything about that speech which should concern investors” in the pharmaceutical industry.

Shares of several major drug and biotech companies rose immediately after the speech, as did the stocks of pharmacy benefit managers, the “middlemen” who Mr. Trump said had gotten “very, very rich.” The Nasdaq Biotechnology Index rose 2.7 percent on Friday. CVS Health, which manages pharmacy benefits for many insurers and employers, finished up 3.2 percent.

Mr. Trump and other Republicans are eager to show an achievement on health care this year to counter arguments by Democrats who say that Americans are losing coverage because of Mr. Trump’s efforts to sabotage the Affordable Care Act. Soaring pharmaceutical prices are directly hitting consumer wallets, and high-profile cases — like the sudden jump in the price of EpiPens or the jailing of the hedge fund manager Martin Shkreli, who greatly increased the price of a drug under his control — have turned pharmaceuticals into a hot political topic.

Many of Mr. Trump’s ideas can be put into effect through regulations or guidance documents. Some will require legislation.

Republicans in Congress welcomed the president’s attention to high drug prices and promised to review his proposals, which Mr. Trump said would “derail the gravy train for special interests.”

Democrats embraced the opportunity to push health care back to the center of the political debate.

“President Trump offered little more than window dressing to combat the rising cost of drugs — a problem that is pinching the pocketbook of far too many Americans,” Senator Chuck Schumer of New York, the Democratic leader, said after the speech. “We Democrats have offered a better deal on prescription drugs through true transparency, Medicare Part D negotiation, and a cop on the beat to police and stop exorbitant price hikes.”

After supporting some of those same proposals on the campaign trail, Mr. Trump pivoted to a different approach. He said his administration would provide new powers for Medicare’s private prescription drug plans, known as Part D, to negotiate lower prices but he would not use the purchasing power of the federal government to conduct direct negotiations. He said he would make it easier for pharmacists to inform patients of cheaper alternatives and would speed the approval of over-the-counter drugs “so that patients can get more medicines without prescription.”

Mr. Trump also denounced foreign countries that he said “extort unreasonably low prices from U.S. drugmakers” so that their citizens often pay much less than American consumers for the same drugs.

“America will not be cheated any longer, and especially will not be cheated by foreign countries,” Mr. Trump said. He directed his trade representative to “make fixing this injustice a top priority” in negotiations with every trading partner.

“It’s time to end the global freeloading once and for all,” Mr. Trump said.

It is not clear why higher profits in other countries would be passed on to American consumers in the form of lower prices, and officials in those countries pushed back hard.

“With our price regulations, drug companies are still making profits — just lower profits than in the United States,” said Dr. Mitchell Levine, the chairman of Canada’s Patented Medicine Prices Review Board, which reviews prices to ensure they are not excessive.

The administration floated several ideas that could radically change the marketing of prescription drugs.

Alex M. Azar II, the secretary of health and human services, said the Food and Drug Administration would explore requiring drug companies to disclose list prices in their television advertisements.

The government, he said, will consider whether to “outlaw rebates” — the discounts and price concessions that are a key link in the drug supply chain. Pharmacy benefit managers are hired by insurers and large employers to negotiate lower drug prices, but they also receive rebate payments from drugmakers, creating a potential conflict of interest, the administration said.

Mr. Trump said he would end “the dishonest double-dealing that allows the middleman to pocket rebates and discounts that should be passed on to consumers and patients.”

Mark Merritt, the president and chief executive of the Pharmaceutical Care Management Association, which represents drug benefit managers, said the real problem was the high prices set by drugmakers.

“Getting rid of rebates and other price concessions would leave patients and payers, including Medicaid and Medicare, at the mercy of drug manufacturers’ pricing strategies,” Mr. Merritt said.

Thomas M. Moriarty, an executive vice president of CVS Health, said his company already offers clients the option to share rebates and discounts with consumers when they fill prescriptions.

Experts said some of the president’s ideas could help lower drug prices.

“It’s framed as a pro-competitive agenda, and touches on a range of government programs that the administration can change through regulation — so that the president can take unilateral action,” said Daniel N. Mendelson, the president of Avalere Health, a research and consulting company. “The trick here for the administration is to do something visible before the midterm elections, so they can take credit for an action that reduces drug prices for consumers.”

Mr. Trump’s “blueprint to lower drug prices” has four main themes: increasing competition in drug markets; giving private plans more tools to negotiate discounts for Medicare beneficiaries; providing new incentives for drug manufacturers to reduce list prices; and cutting consumers’ out-of-pocket costs.

The administration would lower out-of-pocket costs for Medicare patients by requiring prescription drug plans to pass on some of the discounts and rebates they receive from drug manufacturers. Patients could see those savings at the pharmacy counter. At the same time, Medicare officials say, there could be a modest increase in premiums for Medicare drug coverage.

Health policy experts like this idea because it reduces the burden on patients with serious chronic illnesses and spreads the expense of needed medications across the entire insured population.

But Democrats said Mr. Trump’s policy prescriptions fell far short of what was needed, especially next to the populist promises he made during the 2016 campaign.

“I think very expensive champagne will be popping in drug company boardrooms across the country tonight,” said Representative Elijah E. Cummings, Democrat of Maryland, who has been investigating drug prices for the last year. “The president is apparently abandoning his campaign promise to authorize Medicare to negotiate directly with drug companies to lower prices.”

Administration officials were somewhat defensive about the president’s plan, saying it was bold and significant even though it was not what Democrats wanted — or what candidate Trump favored.

In a round of television interviews on Friday, Mr. Azar said the president’s plan included “over 50 different initiatives — very sophisticated, the kind of thing you’d expect from a C.E.O. like Donald Trump, getting at the real heart of the business problem.”

Mr. Azar said the president’s plan would “unleash those who negotiate for us with the greater powers of the private sector” to obtain good deals.

In trade negotiations, the White House wants to put pressure on other countries to increase the prices of brand-name drugs, with the expectation that pharmaceutical companies would then lower prices here at home.

America’s trading partners “need to pay more because they’re using socialist price controls, market access controls, to get unfair pricing,” said Mr. Azar, a former top executive at the drugmaker Eli Lilly and Company. “And they’re doing it on the backs of their patients. God help you if you get cancer in some of these countries.”

Other nations, also struggling with high drug prices, scorned Mr. Trump’s advice on this issue.

“Drug manufacturers in the United States set their own prices, and that is not the norm elsewhere in the world,” a spokesman for the 28-member European Union said on Friday. “E.U. member states have government entities that either negotiate drug prices or decide not to cover drugs whose prices they deem excessive. No similar negotiating happens in the U.S.”

Katie Thomas contributed reporting from Chicago, and Peter Baker from Washington.

6 Takeaways From Trump’s Plans to Try to Lower Drug Prices

Image
Alex M. Azar II, the secretary of health and human services, and President Trump announced a “blueprint” to try to lower drug prices.CreditTom Brenner/The New York Times

President Trump has the power to sink pharmaceutical stocks with a single jab about high drug prices.

But in a much-anticipated speech on the topic on Friday, Mr. Trump largely avoided the issues the industry fears the most, such as allowing Medicare to directly negotiate drug prices, or allowing Americans to import drugs. Investors noticed: Stocks of major drug companies rose after his speech, as did those of pharmacy benefit managers, or the “middlemen” that Mr. Trump said were getting “very, very rich.”

As the health care world parsed the president’s newly released “blueprint” to lower drug prices, the overarching insight seemed to be this: The drug industry’s formidable lobbyists had won some key victories, even if they did not escape entirely unscathed. Many proposals were light on detail and will need action by Congress to become real.

Yet Mr. Trump won some praise for having taken a stab at tackling such a complex and vitally important issue to many Americans.

Here is a rundown of the key proposals unveiled on Friday.

Lower drug prices for older people

On the campaign trail, Mr. Trump embraced allowing Medicare to negotiate the price of the drugs it buys for older people, an issue traditionally supported by Democrats but long opposed by Republicans — and the powerful drug industry.

Friday’s proposal falls far short of that goal. But it does include some ideas for giving the government better leverage in negotiating with drug companies. It calls for exploring whether to allow Medicare drug plans to pay different amounts for the same drug, depending on the illness involved. And it would experiment with “value-based purchasing” in federal programs, essentially a money-back guarantee in which a drugmaker promises to refund money if a medication does not work as expected. Drug companies and insurers are increasingly entering into these kind of arrangements, although the evidence is far from clear that they lower costs.

The administration also reiterated earlier proposals: making generic drugs free for some low-income older people on Medicare and allowing people to keep a portion of the rebates that are normally pocketed by the insurers that manage the Medicare drug program.

Persuade other countries to pay more

One key proposal would involve pressuring other countries to raise their prices for prescription medicines. Drug prices in the United States are the highest in the world; many countries with centralized health care systems have successfully negotiated lower prices from pharmaceutical companies.

Mr. Trump, echoing the longstanding position of the drug industry, has said these companies are “free-riding” off the ingenuity of American corporations, and that high drug prices in the United States are subsidizing innovation that benefits the whole world.

The Trump administration plans to work with several federal agencies to address what it described as this “unfair disparity.”

But it is unclear whether other countries would be willing to raise their prices, or whether doing so would lead drug companies — which are beholden to shareholders hungry for profit — to lower prices in the United States.

Require drug ads to include the price

Prescription drug commercials are ubiquitous. But what if those ads had to disclose the drug’s price? That is something the Trump administration says it wants to explore.

The idea would certainly grab attention, and fear of a consumer backlash could pressure some drugmakers into dropping their prices.

But the notion poses a lot of issues For one: which price? The list price, which is about what a pharmacy would charge if someone paid for the drug in cash? Or the discounted price that insurers and employers pay? Most consumers have health insurance and pay a much smaller out-of-pocket cost, although that can still add up to thousands of dollars a month.

Other questions include whether such a requirement would survive a First Amendment challenge, and whether posting a high sticker price — which few ultimately pay — could dissuade patients seeking out a necessary drug.

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Oleg Deripaska

From Wikipedia, the free encyclopedia
Oleg Deripaska
Дерипаска Олег Владимирович.jpg

Deripaska in 2012
Born Oleg Vladimirovich Deripaska
2 January 1968 (age 50)
DzerzhinskNizhny Novgorod OblastRussian SFSR
Residence Moscow, Russia
Citizenship Russia
Cyprus[1]
Alma mater Moscow State UniversityPlekhanov Russian Academy of Economics
Occupation Chairman of Supervisory Board of Basic Element Company
Net worth DecreaseUS$3.7 billion (April 2018)[2]
Spouse(s) Polina Yumasheva (m. 2001)
Children 2
Awards
Website Basic Element
Deripaska.com

Oleg Vladimirovich Deripaska (Russian: Оле́г Влади́мирович Дерипа́ска; born January 2, 1968)[3] is a Russian oligarch of Jewish descent, aluminium magnate and philanthropist.[1] He is the founder and owner of one of the largest Russian industrial groups Basic Element. He was the president of En+ Group and United Company Rusal, the second largest aluminium company in the world,[4] until 2018.[5]

After graduating from Moscow State University with a degree in physics, Deripaska became a metals broker specialized in trading aluminium before expanding into energy, machinery, financial services and agribusiness. In 2000, Deripaska founded Rusal, the result of a partnership between Sibirsky Aluminium and Roman Abramovich‘s Millhouse Capital.[6] In 2007, Rusal merged with SUAL Group and Glencore International AG to form UC Rusal, with Deripaska as chairman.[7]

He was once Russia’s richest man, worth $28 billion, but nearly lost everything due to mounting debts amid the 2007–08 financial crisis. As of May 2017, his wealth was estimated by Forbes at $5.2 billion.[8] Deripaska is also known for his close ties to Russian president Vladimir Putin, as well as his connection to American political consultant Paul Manafort, whom Deripaska employed from at least 2005 to 2009.[9]

Deripaska is also the founder of Volnoe Delo, Russia’s largest charitable foundation, and is reported to have donated more than $250 million to mostly educational causes. He is married to Polina Yumasheva, step-granddaughter of former Russian President Boris Yeltsin and daughter of Valentin Yumashev, Yeltsin’s son-in-law and close advisor.

Deripaska was also granted Cypriot citizenship in 2017.[1]

Education and early career

Early life

Deripaska was born in DzerzhinskNizhny Novgorod OblastSoviet Russia and grew up in Ust-LabinskKrasnodar Krai. His parents were from Kuban[10]. He is of Russian-Jewish ancestry.[11]. Deripaska grew up on the family’s small farm, where from the age of 5 or 6, he learned how to live off the land from his grandparents,[12] who primarily raised him after his widowed mother, an engineer, had to leave to find work.[13] Deripaska credits his grandparents for teaching him the discipline of hard work along with farming.[12] Both his grandfathers fought in the Second World War; one was killed in battle and buried in a mass grave in Austria, the other returned to Russia after the war ended.[14]

Deripaska’s first job was at the Ust-Labinsk plant where his mother worked. At age 11, he became an electrician’s apprentice doing maintenance on electrical motors.[14] Deripaska acquired a passion for reading; his favorite authors were Mayne Reid and Jack London.[14]Today, Basic Element’s headquarters contain walls of books, reflecting Deripaska’s lifelong love of reading.[14] His talent for math allowed him to enroll at the physics faculty of Moscow State University in 1985.[12] One year into his studies, he was conscripted into the armed forces and served in the Soviet army’s Strategic Missile Forces[12] in the Trans-Baikal area, Siberia, from 1986–1989.[14]

Education

In 1993, Deripaska graduated with honors in physics from Moscow State University;[15] however, the collapse of the Soviet Union greatly eliminated academic funding and made it impossible for him to continue his studies as a theoretical physicist.[14] There were no stipends or grants for students either. “We had no money. It was an urgent and practical question every day. How do I earn money to buy food and keep studying?” he recalls.[14] In 1996, he earned a master’s degree from the Plekhanov University of Economics.[13]

Early career

At the age of 25, teaming up with fellow physicists, engineers and rocket scientists, Deripaska set up his first metal trading company, VTK. He adopted a systematic, scientific approach to commodity trading. “I represented companies that were buying and selling raw materials”, Deripaska said.[12] Deripaska undertook export arbitrage, buying metal at low Russian prices and selling it abroad at significantly higher international market prices. Deripaska traded primarily through the Baltic state of Estonia as the Russian system of export licenses was in disarray.[12] “I started my business at an unusual moment in history. The country in which I was born raised had disappeared, although the new country was not fully formed. The first one gave me an excellent education; the second one gave me the chance of success”, Deripaska recalled in an interview with Metal Bulletin.[14]

He used nearly all his arbitrage and trading profits to acquire his initial package of shares in the Sayanogorsk Aluminium Smelter in Southern Siberia.[16] Between 1993 and 1994, Deripaska bought vouchers and shares in Sayanogorsk, and accumulated a 20% stake in the factory, becoming the biggest individual shareholder after the Russian State — to the annoyance of the plant’s Communist-era bosses.

In 1994, Deripaska became director general of the plant at the age of 26.[12] In 1997, the smelter became the core asset of Sibirsky (Siberian) Aluminium Group.[17] Deripaska was general manager and the main shareholder of the Sayanogorsk Smelter (1994–97) and held the post of president of Sibirsky Aluminium Investment Industrial Group (1997–2001), which later became the core asset of RUSAL.[18]

Growth with RUSAL

RUSAL went on to become the largest aluminium producer in the world, until the China Hongqiao Group surpassed it in 2015. In 2010, under Deripaska’s leadership, Rusal became the first Russian company to be listed on the Hong Kong Stock Exchange.[14]

Beyond metals, which remain at the core of his diversified industrial holding, Deripaska has acquired stakes in a wide range of companies in various sectors, including energy, manufacturing, commercial vehicles, auto components, financial and insurance services,[19]leasing businesses, construction,[20] aviation, and agriculture. Among his assets are a Siberian power company EuroSibEnergo,[21] that is Russia’s biggest private energy company; Ingosstrakh, one of Russia’s largest insurance companies; GAZ Group, a producer of cars, trucks and buses, agricultural business (Kuban Agro Holding);[22][23] and transport companies, such as a cluster of airports in the Krasnodar region, including Sochi and Krasnodar.[24] All these assets form part of the diversified investment and industrial group Basic Element.[25]

In fact, Basic Element built several Olympic facilities for 2014 Winter Olympics in Sochi, including the Coastal Olympic Village, Imeretisnkiy sea port, Doubler of Kurortny Avenue in Sochi, renovation of the Sochi International Airport. The total investments account for over $1.4 billion.[26]

Later business career

EN+ Group

The group was formed in 2006, with Oleg Deripaska as President and controlling shareholder.[27] The EN+ Group is a diversified mining, metals and energy groups. It owns a majority stake in UC Rusal (48.13%[28]) and in EuroSibEnergo. EN+ also holds interests in SMR, one of the world’s largest ferromolybdenum producers.

In 2017, it reported adjusted core earnings of $2.3 billion, on revenues totaling $9.8 billion.[29] Due to ongoing recovery in the commodity industry, EN+ Group announced plans to be listed at the London Stock Exchange in the first half of 2017.[30] EN+ could be valued between $10 billion and $12 billion.[30]

Basic Element

Deripaska is the sole owner and Chairman of Supervisory Board of Basic Element, a diversified investment group established in 1997. Basic Element’s assets are concentrated in five sectors: energy, manufacturing, financial services, agriculture, construction and aviation. The major assets include United Company RUSAL[31] the world’s largest aluminium and alumina producer; GAZ Group, an automotive companyIngosstrakh, the country’s oldest insurance company; Bank SOYUZ (Банк «СОЮЗ»);[32] Aviakor aircraft manufacturer; EuroSibEnergo (ЕвроСибЭнерго), an investment and energy supply company;[21] Glavmosstroy (Главмосстрой), a construction company;[33] Kuban Agroholding, an agricultural company;[22] and Basel Aero, an aviation business comprising the four largest airports in the Krasnodar territory (in joint venture with Changi Airports International).[24]

Basic Element owns companies and subsidiaries in Russia, the CIS countries, Africa, Australia, Asia, Europe and Latin America. It employs as many as 250,000 people.[25]

Metals and mining

RUSAL

United Company RUSAL is the world’s second largest aluminium company. It was the largest until it was overtaken by China Hongqiao Group in 2015. UC RUSAL accounts for almost 7% of the world’s primary aluminium output and 7% of the world’s alumina production. UC RUSAL was formed through a series of mergers and acquisitions.

In 2000, Deripaska’s Sibirsky Aluminium and Roman Abramovich‘s Millhouse Capital created a partnership to manage the aluminium and alumina assets they controlled, and founded RUSAL.[34]

In 2003, businesses led by Deripaska increased their stake in those companies under common management to 75% by acquiring half of the interest managed by Millhouse Capital.[35]

In 2004, the consolidation of RUSAL’s ownership by companies related to Deripaska was completed with the acquisition of the remaining 25% equity interest in RUSAL managed by Millhouse Capital.[34]

In order to ensure a stable supply of alumina to its smelters, several mergers and acquisitions were accomplished by RUSAL under Deripaska’s guidance. At the beginning of the 2000s, RUSAL acquired bauxite mines in Guinea, a country with the world’s largest bauxite reserves. Subsequently, RUSAL acquired a stake in an alumina refinery in Australia. After the merger with Glencore, bauxite and alumina assets in Jamaica, Italy and Ireland were added to RUSAL’s portfolio. These transactions converted RUSAL from a company with few supplies of the raw material bauxite into a vertically integrated corporation.[36]

In parallel, Deripaska invested significantly in the operational improvement of smelters inside Russia. He said, “We consolidated the industry, and located bauxites that do not exist in Russia. We established the company that became the leader of industry in less than twelve years. But to become the number one alumimium producer in the world, we had to improve our operations practice. To apply the best practices in the world, we looked at Toyota, which had utilized a precise, deep and well thought-through process for almost thirty years of operations.”[37]

Deripaska himself has been an active supporter Japanese production efficiencies made popular by the “Toyota Way.” RUSAL smelters have adopted the concept of kaizen, which means continuous improvement and involves training workers in standardized production techniques. “It’s important to change both the company’s mind set and reporting lines,” Deripaska said. “Instead of top-down management, you should understand everything is in the hands of your operator and empower that operator to drive efficiencies and improvements directly on the factory floor.”[12]

Under Deripaska’s leadership, RUSAL undertook large-scale modernization projects at a number of its facilities, including the Bratsk, Krasnoyarsk and Irkutsk aluminium smelters.[38]

At Deripaska’s behest, in 2007, RUSAL; SUAL Group, one of the world’s top 10 aluminum producers; and Glencore International AG, the Swiss natural resources group, merged their assets to form United Company RUSAL, the world’s largest aluminum and alumina producer.[39]

With the onset of the financial crisis in 2008, UC Rusal was provided with a $4.5 billion loan from Russian state bank VEB to ease the company’s debt burden.[40]

In the middle of the financial crisis, Deripaska returned in 2009 to RUSAL as CEO to lead the company through the debt restructuring process. “I worked 16-hour days. We were in default, although none of the parties involved wanted to call it default.” As part of contingency measures, Deripaska cut costs at RUSAL by 25% in 2009. By December 2009, Deripaska reached a final agreement with over 70 Russian and international lenders to refinance US$17 billion of debt.[12]

In 2017, Rusal issued two Eurobonds to finance its debts. The first one, worth $600 million, was issued in February[41], followed by the second one in April, worth $500 million.[42] Also in February, plans were announced to sell 10 billion yuan worth of seven-year onshore bonds to finance purchases in China. This made Rusal the first foreign company to offer panda bonds on the Shanghai Stock Exchange.[43] The company also agreed on a pre-export finance mechanism with international lenders worth $1.7 billion for debt refinancing.[44]

In 2013, Deripaska was awarded the “Aluminium Industry Ambassador Award” in the Metal Bulletin Awards for Excellence for his “great influence within the global aluminium industry and the wider market”.[45]

As of 2017, Deripaska maintains his position as president of RUSAL, focusing on the strategic development of the company, which employs more than 61,000 people in 20 countries on five continents.[46]

Energy

EuroSibEnergo

Oleg Deripaska owns a 100% stake in EuroSibEnergo, the world’s largest private hydrogeneration company and the largest private power company in Russia.[47] It controls and manages 18 power plants with a combined installed energy capacity of 19.5 GW, including 15 GW provided by hydrogeneration. The company produces approximately 9% of all electricity in Russia and is also the leader in the Siberian energy market, with a market share totaling 41%. Some of EuroSibEnergo’s key clients include the largest aluminum plants in Russia. The company owns large fuel resources, which satisfy over 85% of the coal needs of its thermal power and boiler plants. Its coal reserves amount to 1.26 billion tons, with annual coal production exceeding 12 million tons.[47]

Deripaska’s En+ Group, of which EuroSibEnergo is a subsidiary, is investing in a joint venture with China’s largest hydroelectric power generation company China Yangtze Power Co to build new power plants in Siberia, primarily hydroelectric ones, with a total capacity of up to 10 GWt.[48]

Machinery

Russian Machines

Russian Machines corporation was established in 2005 and unites Oleg Deripaska’s machine building assets. It comprises industrial and engineering assets in the following industries: automotive OEM (GAZ Group), automotive components (RM-Systems), rail industry (RM Rail), aircraft OEM (Aviacor), road construction (RM-Terex) and agricultural machinery (AGCO-RM).[49]

Russian Machines Corporation manages 24 facilities located across 12 regions in Russia.[49]

GAZ Group

In 2000, Deripaska started acquiring machine building assets. His first acquisition was Nizhny Novgorod-based Gorkovsky Automobile Plant (GAZ), which was previously a government-run company. In 2005, GAZ Group was established by combining the businessman’s machine building assets.[50]

The Russian automotive conglomerate, GAZ Group, comprises 18 manufacturing facilities in eight regions of Russia, as well as sales and service organizations. GAZ Group produces light and medium commercial vehicles, heavy trucks, buses, cars, road construction equipment, power units, and automotive components.[49]

Airports

Oleg Deripaska’s airport business is managed by Basel Aero, a company-operator of the SochiKrasnodarGelendzhik, and Anapa airports.[51]

These airports handle more than 7% of the total passenger flow in Russia.[52] Sochi International Airport was the main gateway to Sochi 2014 Winter Olympics and successfully serviced the guests and participants of the Games.[51]

In October 2014, Sochi was granted open skies status, meaning that any foreign carrier may pick up and drop off passengers and cargo with no restrictions on aircraft type, frequency, and regardless of interstate agreements.[53]

Financial services

Deripaska personally holds 10% of Ingosstrakh‘s ordinary shares. The company is a leading insurer of complex risks such as insurance for ship owners, ship hull insurance, insurance against aviation and space-related risks, and insurance of transportation companies. Ingosstrakh has 83 branches in Russia and the company’s offices operate in 220 Russian towns and cities.[54]

Agribusiness

Oleg Deripaska fully owns Kuban Agroholding, a massive agribusiness in southern Russia. The company integrates two dairy farms, а 16,000 pig capacity breeding complex, three elevators with non-recurrent grain storage capacity of more than 270,000 tonnes, three-seed plants, a sugar factory and the Sunrise horse breeding farm, specializing in the breeding of English thoroughbred horses. It is one of the top-20 largest agribusinesses and top-5 most efficient land users in Russia.[55]

Kuban Agroholding is one of the few agrocompanies in Russia involved in embryo transfer technology that allows for the reproduction of high-yielding milk cows out of less productive recipients.[56]

The company has gained significant media attention about its corn-seeding program, deploying several dozen corn brands selected by its genetic specialists.[56]

Other business appointments

In 2004, Deripaska was appointed by the President of Russia to represent the country in the Asia-Pacific Economic Cooperation Business Advisory Council (ABAC). He has been Chairman of ABAC Russia since 2007. Deripaska is the vice president of the Russian Union of Industrialists and Entrepreneurs, chairman of the executive board of the Russian national committee of the International Chamber of Commerce and a member of the Competitiveness and Entrepreneurship Council, an agency of the Russian government.[57]

He has been a permanent participant at World Economic Forum sessions since 2007, when RUSAL became a WEF strategic partner.[58]

In May 2007, Magna International chairman Frank Stronach announced that Deripaska was becoming a strategic partner in Magna.[59]

Deripaska is also a member of the International Council at Harvard University‘s Belfer Center for Science and International Affairs.[60]

Deripaska personally initiated construction of the Centre for Epidemic and Microbiological Research and Treatment in the Guinean Kindia province. The Centre was designed and constructed by RUSAL specialists with the assistance of Rospotrebnadzor scientists (RUSAL has invested $10 million).[61]

Controversies

Cherney lawsuit

Michael Cherney brought legal action against Deripaska in the Commercial Court of the High Court in London.[62] Cherney sought a declaration that he was the beneficial owner of 20% of RUSAL stock which, he claimed, Deripaska held in trust for him. The claim was denied. On 3 May 2007, Justice Langley ruled that Deripaska had not been properly served, and that the court had no jurisdiction to try the claim as Deripaska did not live in England or Wales.[63]

On 3 July 2008, Justice Christopher Clarke ruled that the case should be tried in England, although “the natural forum for this litigation is Russia”, because, he held, “risks inherent in a trial in Russia…are sufficient to make England the forum in which the case can most suitably be tried in the interest of both parties and the ends of justice”.[64] On 22 July 2008, he granted Deripaska leave to appeal. The Court of Appeal of England and Wales refused the appeal on 31 July 2009.[65]

At a June 2011 case management conference, the judge deferred a decision on whether Cherney would be allowed to give evidence by video link from Israel rather than appear in person. An outstanding arrest warrant issued by Interpol meant that the British would detain him if he travelled to the UK.[66][67] In late July 2011, the High Court ruled to allow Cherney to give evidence at the trial by video link from Israel, and also set trial for April 2012.[68] Deripaska denied that Cherney was owed any stake in RUSAL, and asserted payments made to Cherney had been for unavoidable “protection” at a time when violence was sweeping the region and posed an existential threat to any profitable business in the country. In an interview with The Telegraph, Deripaska said he was one of the few who worked to clean up Russian industry and provided support to law enforcement agencies. However, in this early chaotic period paying protection money to criminal gangs was inescapable, as revealed in court testimony.[69]

In September 2012, Cherney terminated his UK lawsuit against Deripaska.[70]

U.S. investigation

In 2015, Deripaska filed a lawsuit against Morgan Stanley, accusing the bank of using insider information to short sell the businessman’s $1.5 billion investment in shares of Magma in 2008.[71]

In 2007, Deripaska’s Veleron investment vehicle acquired stock in Canadian based Magna International through a $1.2 billion loan from BNP Paribas, with Magna shares serving as collateral.[72] Morgan Stanley was involved in the deal through a swap agreement with BNP Paribas where the US bank assumed the risks of the loan in return for a fixed payment from Paribas.[73]

In September 2008, Magna’s stocks plummeted, hit by the global economic downturn. BNP issued a $93 million margin call to Veleron. Morgan Stanley, in turn, learned that Veleron was unlikely to meet the call and sold the stock short.[74] Deripaska claimed that Morgan Stanley abused its duties and engaged in unlawful insider trading that resulted in significant financial damage to Veleron, estimated at $15 million to $25 million.[73] A New York jury determined in November 2015 that Morgan Stanley had “acquired inside information and traded on it despite a duty to keep it confidential and not trade on it,” finding as well that Morgan Stanley did not have the intent to defraud Veleron. Veleron strongly disagreed with and said it would file an appeal.[74][when?]

In July 2006, whilst Deripaska was involved in a bid to buy the Daimler Chrysler Group, it was reported that the United States canceled his entry visa; the unnamed official declined to give a reason for the revoking of the visa. The Wall Street Journal reported that it could have been because Deripaska has been accused of having links to organized crime in Russia and cited as their sources two unnamed U.S. law enforcement officials.[75] Deripaska had received a multiple-entry visa in 2005; a U.S. Federal Bureau of Investigationspokesman refused to comment. Lobbying on his behalf had been done by former Senate Republican leader and 1996 presidential candidate Bob Dole and his Alston & Bird law partners, Senate records show. Alston & Bird was paid about US$260,000 in 2005 for work on “Department of State visa policies and procedures” tied to Deripaska.[75]

In 2009, Deripaska was again allowed entry and visited the United States twice. The Wall Street Journal reported that according to two unnamed FBI administration officials, Deripaska had met with agents regarding a continuing criminal probe, the details of the probe were not known or reported. During Deripaska’s visits, he met with leading management figures from investment banks Goldman Sachs and Morgan Stanley. The Aluminum company that Deripaska heads, United Company RUSAL, was in preparations for an initial public offering. The easing of Deripaska’s visa issues which were an issue for possible investors helped to reassure bankers. The State Department has never said why it revoked his visa and refused to comment on his 2009 visits. The visits were arranged outside of the usual process as the U.S. continues to have concerns about Deripaska’s business associations. Deripaska has repeatedly denied a connection to any organized crime and said business rivals have caused the visa to be revoked by smearing him. When interviewed by the BBC in July 2009, Deripaska said that the authorities in the United States had been attempting to blackmail him by revoking his visa and thus affecting possible investors in a negative way and thereby hoping to push Deripaska into cooperating with them.[76]

Spanish investigation

According to an article in El Mundo, Deripaska and Iskander Makhmudov (head of UGMK) were asked by Spanish police to answer questions in relation to a money-laundering enquiry.[77] The Spanish state prosecutor’s office subsequently confirmed Deripaska’s interrogation.[78]

While Deripaska has been interrogated previously as a witness in Spain and England and by the FBI in cases of money laundering, he has never been charged with any crimes in those probes.[79]

On 25 January 2010, the Financial Times published a story “Rusal: A lingering heat” exploring Deripaska’s business relations with Sergei Popov and Anton Malevsky, alleged heads of Russian organized crime groups.[80] Deripaska has accused Michael Chernoy of using Malevsky and the Izmailovskaya syndicate to extort US$250 million from him as part of a protection racket.[81] However, Deripaska has himself been accused of having similar links to Malevsky, who, with his brother Andrei, owned a 10% stake in Deripaska’s company. Deripaska denies the claims.[82]

In November 2011, Spain’s High Court sent the criminal cases against Deripaska to the Russian General Prosecutor’s office because the root of the cases is Russian.[83]

Political relationships

Vladimir Putin and Deripaska, March 19, 2002

Vladimir Putin

Deripaska is noted for his close ties with Russian President Vladimir Putin. Their relationship was visibly strained amidst Deripaska’s financial struggles in 2009, but in a widely broadcast incident on Russian television, Putin visited a stalled cement factory owned by Deripaska and berated its management. He forced Deripaska to sign a contract promising to pay nearly $1 million in unpaid wages.[13][84] Their relationship recovered, however, and Deripaska has been described as “Putin’s favorite industrialist“.[85] Leaked U.S. diplomatic cables from 2006 described Deripaska as “among the 2-3 oligarchs Putin turns to on a regular basis” and “a more-or-less permanent fixture on Putin’s trips abroad”.[86] In an interview with The Globe and Mail, Tye Burt, who knows Deripaska and is the CEO of Kinross Gold said that, “I believe Russia recognizes Oleg’s major role in building a renewed economic base in a broad range of domestic businesses and rejuvenating ailing companies and infrastructure.”[13]

Nathaniel Rothschild and Peter Mandelson

Deripaska is a friend of Nathaniel Rothschild, a major investor in both Glencore and United Company RUSAL. Together Deripaska and Rothschild hosted George Osborne and Peter Mandelson on Deripaska’s yacht in Corfu in the summer of 2008.[87] Osborne was then Shadow Chancellor of the Exchequer of the United Kingdom and a friend of Rothschild from school and university. It was reported that Peter Mandelson have maintained private contacts over several years with Oleg Deripaska[88]

News of the contacts sparked criticism because, as European Union Trade Commissioner, Mandelson had been responsible for decision to cut aluminium tariffs from 6 to 3%, a decision that had benefited Deripaska’s Company RusAl.[89] Mandelson insisted that he had never discussed aluminium tariffs with Deripaska.[90] On 26 October 2008 the Shadow Foreign Secretary William Hague claimed the “whole country” wanted “transparency” about Mandelson’s previous meetings with Deripaska. In response, Prime Minister Gordon Brownsaid Mandelson’s dealings with Deripaska had been “found to be above board”.[91] Mandelson said that meeting business figures from “across the range” in emerging economies was part of his brief as EU Trade Commissioner.[92] On 29 October 2008, while Mandelson was on a ministerial visit to Moscow,[93] it was alleged in the British press that Valery Pechenkin, the head of security at Deripaska’s company Basic Element, had organised a swift entry visa for Mandelson when he turned up in Moscow to visit Deripaska in 2005.[94]

Paul Manafort

On 22 March 2017, the Associated Press published a report alleging that Paul ManafortDonald Trump‘s former presidential campaign manager, negotiated a $10 million annual contract with Deripaska to promote Russian interests in politics, business, and media coverage in Europe and the United States, starting in 2005.[95] Both Deripaska and Manafort have confirmed to have worked together in the past,[96] but rejected the contents of the AP story. Manafort argued that his work had been inaccurately presented, and that there was nothing “inappropriate or nefarious” about it.[97]

Responding to the allegations, on March 28, 2017, Deripaska published open letters in the print editions of The Washington Post and The Wall Street Journal, in which he denied having signed a $10 million contract with Manafort in order to benefit the Putin government.[98] He also stated his willingness to testify before the United States Congress to dispel these allegations,[99] and argued that the accusations fall “into the negative context of current US-Russian relations.”[100] According to Congressional sources cited by The New York Times, lawmakers declined Deripaska’s request, after it emerged that he had asked for immunity. Unnamed officials argued that “immunity agreements create complications for federal criminal investigators”.[101]

On May 15, 2017, Deripaska filed a defamation and libel lawsuit against the Associated Press in a U.S. District Court in D.C., arguing that[102] the outlet’s report falsely claimed that Deripaska had signed a contract with Manafort to advance the goals of the Russian government.[103] However, the lawsuit was dismissed in October 2017 on the grounds that Deripaska had not disputed “any material facts” in the story by the Associate press [104]

During the 2016 Presidential campaign, Manafort, via Kiev-based operative Konstantin Kilimnik, offered to provide briefings on political developments to Deripaska, though there is no evidence that the briefings took place.[105][106] Behaviors such as these were seen as an attempt by Manafort to please an oligarch tied to Putin’s government.[107]

Navalny video

In February 2018, Alexei Navalny published a video about a meeting between Deripaska and Deputy Prime Minister of Russia Sergei Eduardovich Prikhodko on a yacht traveling near Norway. According to Navalny, Deripaska probably served as a middle man between the Russian government represented by Prikhodko and Paul Manafort during Russian interference in the 2016 United States elections.[104] Prikhodko denied the allegations, accusing Navalny of “mixing the facts” about his “friend” Deripaska, Donald Trump and Paul Manafort, while also voicing his wish to have talk with Navalny as a “man with a man”.[108][109][110]

A day after the video was published the Roskomnadzor added the video to the Federal List of Extremist Materials, thus making accessing the video illegal for all Russian citizens.[111] It also ordered YouTube to remove seven videos and Instagram to take down 14 points that were cited in the investigation; neither YouTube nor Instagram had responded as of February 12, 2018. According to a Roskomnadzor representative who spoke to Vedomosti, a “court injunction of this sort against content hosted on Instagram and YouTube is unprecedented for Russia”. The New York Times noted that this may presage a “more aggressive approach by the Russian government” to control online activities.[112]

The New York Times reported on 5 March 2018, that Anastasia Vashukevich, a Belarusian national currently incarcerated in Bangkok, claims to have over 16 hours of audio recordings she says could shed light on possible Russian interference in American elections. She is offering the recordings to American authorities in exchange for asylum, to avoid extradition to Belarus. Vashukevich claims to be close to Deripaska and asserts the recordings include him discussing the 2016 presidential election with associates Vashukevich did not name. “Deripaska had a plan about elections,” The New York Times quoted Vashukevich as saying. She stated that some of the recorded conversations, which she asserts were made in August 2016, included three individuals who spoke fluent English and whom she believed were Americans. The New York Times reported that her claims might be easily dismissed were it not for the Navalny video.[113]

U.S. sanctions

In April 2018, the United States imposed sanctions on him and 23 other Russian nationals.[114][115] In the statement from the United States Department of the Treasury it was stated that Deripaska “has been accused of threatening the lives of business rivals, illegally wiretapping a government official, and taking part in extortion and racketeering”. According to the US treasury statement there are allegations that Deripaska ordered the murder of a businessman, and had links to a Russian organized crime group.[116]

Personal life

In February 2001, Deripaska married Polina Yumasheva, the daughter of Boris Yeltsin‘s top adviser Valentin Yumashev and stepdaughter of Yeltsin’s daughter Tatyana. While Yeltsin was president, Deripaska’s close ties put him in Yeltsin’s inner circle, dubbed “The Family”.[117] The Deripaskas have two children: a son, Pyotr (born 2001), and daughter, Maria (born 2003).[118] Deripaska practices yoga, swimming, horseback riding, and hiking. His favorite pets are dogs. At his home near Moscow, he has seven horses and six dogs.[12]

In March 2018, it was reported that Deripaska had successfully purchased Cypriot citizenship in 2017 under Cyprus’ “golden visa” that generates billions of revenue for the island nation. According to documents seen by The Guardian, Deripaska’s first attempt to become a citizen of a country in the EU was unsuccessful because of an preliminary inquiry into his activities in Belgium. The inquiry was dismissed in 2016.[1]

Philanthropy

Volnoe Delo

In 1998, Deripaska established Volnoe Delo, Russia’s largest[citation needed] private charitable foundation.[119][additional citation(s) needed] The fund supports over 400[citation needed] initiatives across Russia aimed at developing education and science, preserving spiritual and cultural heritage, and improving standards in public health.[120][additional citation(s) needed] It helps children, old people, talented youths, teachers, eminent scientists and other participants of the programs. Since 1998, Oleg Deripaska has invested more than RUB10.6 billion[citation needed] in more than 500 charity programs in 50 regions of Russia.[121][additional citation(s) needed]

Volnoe Delo has supported research activities in the 2,550-year-old city of Phanagoria since 2004. More than $10 million has been allocated to Phanagoria fieldwork over the past[which?] decade. Today, Phanagoria is one of the best-equipped archeological expeditions in Russia and has its own scientific and cultural center, cutting edge equipment and technology for above-ground and underwater excavation as well as a large team of specialists involved in the excavation process.[122]

In 2014, Volnoe Delo foundation launched a programme on students’ early career guidance and professional training—JuniorSkills.[123] The first, pilot, championship on professional skills, JuniorSkills Hi-Tech, was held in the Urals city of Yekaterinburg in 2014, part of the nationwide championship on cross-industry blue-collar professions in high-tech WorldSkills.

Climate change

Deripaska is one of the 16 global business leaders who drafted CEO Climate Policy Recommendations to G8 Leaders, a document outlining the international business community’s proposals to tackle global warming. The proposals were signed by more than 100 of the world’s leading corporations and handed to the Prime Minister of Japan Yasuo Fukuda on 20 June 2008. The G8 leaders discussed the recommendations during the summit in Japan on 7–9 July 2008. The process was coordinated by the World Economic Forum in collaboration with the World Business Council for Sustainable Development.[124]

Deripaska actively advocates cutting the global carbon footprint and calls for the creation of an enforcement mechanism with consequences for countries that do not reduce carbon-intensive emissions, such as those produced by coal-fired powerplants.[125] He also remains a strong advocate of a legally binding climate change deal, but has publicly voiced concern about the potential competitive impact of a Paris climate agreement and also about the absence of binding measures to curb each country’s emissions in the near future.[125] “Everyone is in favour; we just need to have more or less fair regulation. There shouldn’t be any pockets where people can cheat the system. People shouldn’t agree on something that creates another Kyoto protocol that creates nice polished statements”, he told the Financial Times in January 2016.[125]

Other activities

In February 2014, Deripaska financed the construction of makeshift kennels to house stray dogs that had been abandoned by construction workers after completing work on the Sochi Olympic Village. Officials said the number of strays exceeded 2,000 and the animals presented a risk of rabies, so they contracted out their extermination. Many of these dogs were saved and more were re-homed in a global adoption program that Deripaska created.[126]

He sits on the board of trustees of the School of Business Administration, the School of Public Administration, and the School of Economics at Moscow State University as well as the School of Business Administration at St. Petersburg State University. Deripaska is a co-founder of the National Science Support Foundation and the National Medicine Fund. In 1999, he was awarded the Order of Friendship, a state award of the Russian Federation. He was named businessman of the year in 1999, 2006, and 2007 by Vedomosti, a Russian business daily.

He sits on the board of trustees of the Bolshoi Theatre, and has financed ballet performances like Flames of ParisLa Sylphide, and Paquita as well as operas like The Legend of the Invisible City of Kitezh and the Maiden FevroniyaCarmen, and Wozzeck.[127]

Net worth

In 2008, Forbes estimated his wealth at US$28 billion, making him the then ninth richest man in the world.[128] In 2009, Deripaska’s ranking fell to a ranking of No. 164, with Forbes stating: “[H]e may not withstand collapsing markets and heavy debts”.[129] In 2010, however, his estimated $10.7 billion fortune allowed him to rise to No. 57 of the World’s Billionaires list.[130] According to Forbes magazine, he removed the heads of his two largest companies and personally negotiated with the Russian government, banks, and other creditors to restructure his loan obligations.[131] Deripaska himself in 2007 was reported to have consistently said that the estimate of his wealth was exaggerated, that it did not completely account for the amount of debt he incurred, and that he should be ranked far below the top ten on the list of the Russian billionaires.[132]

Deripaska has owned the Haft mansion near Embassy Row in Washington, D.C., through a company incorporated in Delaware since 2006.[133]

Forbes estimated his fortune at $3.3 billion in 2015[2] and $5.2 billion in 2017.[8]

See also

References

https://en.wikipedia.org/wiki/Oleg_Deripaska

 

 

Robert Levinson

From Wikipedia, the free encyclopedia
Robert Levinson
Robert-Levinson.png

Levinson while in captivity, taken November 2010
Born March 10, 1948 (age 70)
Disappeared March 9, 2007 (aged 58)
Kish Island
Status Missing for 11 years, 2 months and 6 days
Nationality American
Known for Disappearance in Iran

Robert Alan “Bob” Levinson (born March 10, 1948)[1] is an American former Drug Enforcement Administration and Federal Bureau of Investigation agent who disappeared mysteriously in 2007 in Kish IslandIran. He is believed[according to whom?] to be currently[when?] held captive by the government of Iran.[2][3] He disappeared on March 9, 2007, when visiting Iran’s Kish Island while supposedly researching a cigarette smuggling case.

U.S. officials believed Levinson had been arrested by Iranian intelligence officials to be interrogated and used as a bargaining chip in negotiations with Washington. But as every lead fizzled and Iran repeatedly denied any involvement in his disappearance, many in the U.S. government believed Levinson was probably dead.[4] He was last seen alive in photographs from April 2011, wearing a jumpsuit and holding signs apparently asking for help in broken English.[5]

On December 12, 2013, the Associated Press reported that their investigations revealed that Levinson had been working for the Central Intelligence Agency (CIA),[6][7] contradicting the U.S.’s statement that he was not an employee of the government at the time of his capture.[8]

In an interview, Iranian President Hassan Rouhani spoke of cooperation regarding Levinson’s case. “We are willing to help, and all the intelligence services in the region can come together to gather information about him to find his whereabouts.”[9] John Miller of CBS described this statement as a “tacit admission that he’s in their custody and that there have been talks”.[10]

Iranian involvement

On April 4, 2007, a little over three weeks after Levinson was arrested, an article by Iranian state-run PressTV stated that he “has been in the hands of Iranian security forces since the early hours of March 9” and “authorities are well on the way to finishing the procedural arrangements that could see him freed in a matter of days”. The same article explained that it was established that Levinson’s trip to Kish “was purely that of a private businessman looking to make contact with persons who could help him make representations to official Iranian bodies responsible for suppressing trade in pirated products which is a major concern of his company”.[11]

On January 8, 2013, the Associated Press reported that “the consensus now among some U.S. officials involved in the case is that despite years of denials, Iran’s intelligence service was almost certainly behind the 54-second video and five photographs of Levinson that were emailed anonymously to his family. ‘The tradecraft used to send those items was too good, indicating professional spies were behind them’, the officials said… While everything dealing with Iran is murky, their conclusion is based on the U.S. government’s best intelligence analysis.”[12]

Family investigation

Media reported in August 2007 that Christine Levinson, wife of Robert, was planning a trip to Iran with their oldest son, Dan. The Department of State stressed that there was a travel warning to that country and they would be doing so at their own risk.[13] Iran announced on September 23, 2007, that they would be allowed to visit the country.[14]

In December 2007, Christine and Dan traveled to Iran to attempt to learn more about Levinson’s disappearance. They met with Iranian officials in Tehran and traveled to Robert’s hotel on Kish, the Hotel Maryam.[15] Airport officials allowed Christine and Dan to view the flight manifests for all flights leaving Kish during the time Robert was due to leave, but his name did not appear on any of the lists provided. They were also able to view Robert’s signature from the hotel check-out bill on March 9. Iranian officials promised to provide an investigative report to the family, but have yet to do so.[16] In July 2008 and subsequent interviews, Christine and Dan have said they wanted to travel to Iran again soon.[17]

President Ahmadinejad’s statements on Levinson

Pressed by Charlie Rose in an interview for CBS This Morning in September 2012, former Iranian President Mahmoud Ahmadinejad “did not deny Iran still has Levinson in its custody, and hinted that there had been talks about a prisoner exchange”. Rose asked, “Is there anything that could happen, a trade or something, that could allow him to come back to the United States?” Ahmadinejad responded:

I remember that last year Iranian and American intelligence groups had a meeting, but I haven’t followed up on it. I thought they’d come to some kind of an agreement.

CBS’ John Miller says that “tacit admission that he’s in their custody and that there have been talks”, in and of itself, “is a big step”.[10]

In a 2008 interview with NBC‘s Brian Williams, Ahmadinejad was questioned regarding Levinson’s case and its status. He responded:

There was a claim made some time ago, some people came over, the gentleman’s family came over. They talked and met with our officials and were given our responses. I see no reason for a person who was given an Iranian visa and — came into Iran, arrived in Iran through official channels, to have problems here. Our security officials and agents have expressed their willingness to assist the FBI, if the FBI has any information about his travels around the world. We have said that we are ready to help, to assist with that matter. There are certain informations that only the FBI at the moment has. I am not an expert in that field, as you might appreciate, so I’m not going to make a judgment here whether that information, as they say, is true and only held by the FBI or other parties for that matter.[18]

U.S. government investigation

President Barack Obama meets with Christine Levinson in the Oval Office on March 6, 2012

In June 2007, President George W. Bush released a statement on Levinson’s case, saying: “I am … disturbed by the Iranian regime’s refusal so far to provide any information on Robert Levinson, despite repeated U.S. requests. I call on Iran’s leaders to tell us what they know about his whereabouts.” [19]

On January 13, 2009, U.S. Senator Bill Nelson revealed during Hillary Clinton‘s confirmation hearing that he believes Robert Levinson is being held in a secret prison in Iran. “The door has been closed at every turn,” Nelson said during Clinton’s confirmation hearing. “We think he is being held by the government of Iran in a secret prison.”[20]

According to The New York Times, Levinson had been meeting with Dawud Salahuddin, (an American convert to Islam wanted for the 1980 murder of an Iranian dissident in the US) “just before he went missing”.[21][22]

On March 8, 2013, the Obama administration released a statement to mark the sixth anniversary of Levinson’s kidnapping. Press Secretary Jay Carney said,

Finding him remains a high priority for the United States, and we will continue to do all that we can to bring him home safely to his friends and family, so they may begin to heal after so many years of extraordinary grief and uncertainty. The Iranian Government previously offered assistance in locating Mr. Levinson and we look forward to receiving this assistance, even as we disagree on other key issues.[23]

Secretary of State John Kerry also met with Levinson’s wife and son “to reiterate that the U.S. government remains committed to locating Mr. Levinson and reuniting him safely with his family”.[24]

Reward

On March 6, 2012, approaching the five-year anniversary of Robert Levinson’s captivity, The Federal Bureau of Investigation offered a $1-million reward for information leading to his safe recovery and return. In addition, a campaign was launched, using billboards, radio messages, flyers, and a telephone hotline to publicize this reward and obtain information of his whereabouts.[25] In conjunction with this announced reward, the Society of Former Special Agents of the Federal Bureau of Investigation announced that it was giving the two youngest Levinson children $5,000 each to help with their college costs.[25]

On March 9, 2015, the CIA increased the reward to up to $5 million for information regarding Levinson’s whereabouts.[26]

Proof of life

According to the Associated Press, Levinson’s family received “irrefutable proof” of life late in 2010.[27] On December 9, 2011, the family released the hostage video dated from November 2010. In the video, Robert appears to have lost considerable weight, and repeatedly pleads for help in returning home.[28]

On January 8, 2013, Levinson’s family released photos to the media showing the former agent in an orange jumpsuit with overgrown and unkempt hair. A family spokesman told CNN the photographs were received in April 2011. CNN reported: “Asked why the family is releasing the images now, more than 18 months later, the spokesman said: ‘The family is anxious that not enough is being done. There is frustration with the lack of progress on the case.'”[5]

President Rouhani’s statements on Levinson

In an interview with CNN’s Christiane Amanpour during his trip to the United Nations General Assembly in September 2013, Iranian President Hassan Rouhani spoke of cooperation regarding Levinson’s case. “We are willing to help, and all the intelligence services in the region can come together to gather information about him to find his whereabouts”, Rouhani told Amanpour, “and we’re willing to cooperate on that”.[9]

In a subsequent interview with Charlie Rose, Rouhani said, “As to where his whereabouts when he disappeared, I personally have no information on those details, but naturally when someone disappears their family is suffering in specific. Everyone must help. It’s natural that everyone must help”.[29]

President Obama’s discussion of case with Rouhani

During the Obama-Rouhani phone call on September 27, 2013, the first communication between the presidents of the two countries in 34 years, President Obama noted his concern about Levinson’s disappearance to Rouhani, and expressed his interest in seeing him reunited with his family.[9]

Recent status

On November 26, 2013, Levinson, if he is still alive, became the longest-held hostage in American history, surpassing Terry A. Anderson. According to his family, he suffers from type 1 diabetesgout, and hypertension.[30] His passport has never shown up in any other country.[31]

United States Senate call for release

In a unanimous decision, on May 11, 2015, the United States Senate voted on a resolution for the release of Robert Levinson, which passed without amendment.[32] This resolution states that it is U.S. policy that: (1) the government of the Islamic Republic of Iran should immediately release Saeed AbediniAmir Hekmati, and Jason Rezaian, and cooperate with the U.S. government to locate and return Robert Levinson; and (2) the U.S. government should undertake every effort using every diplomatic tool at its disposal to secure their release.[33]

See also

References

  1. Jump up^ “- INTERPOL”interpol.int.
  2. Jump up^ Goldman, Adam (December 13, 2013). “National Security”The Washington Post.
  3. Jump up^ Pat Milton (2007-05-10). “Intrigue Surrounds Former FBI Agent Who Disappeared in Iran Two Months Ago”San Diego Union-Tribune. Associated Press. Retrieved 2013-01-08.
  4. Jump up^ “Missing ex-FBI agent Robert Levinson in hostage video: ‘Help me'”. Associated Press. 2011-12-09.
  5. Jump up to:a b “Family releases photos of captive American”. CNN.com. 2013-01-10. Retrieved 2013-12-12.
  6. Jump up^ Missing American in Iran was working for CIA, Associated Press, December 12, 2013, retrieved December 12, 2013
  7. Jump up^ “American who vanished in Iran was on unsanctioned CIA mission – report”rt.com.
  8. Jump up^ “White House: Robert Levinson not a government employee”BBC News, BBC, December 13, 2013, retrieved December 13,2013
  9. Jump up to:a b c “U.S. official: Obama, Rouhani discussed fate of three Americans – CNN.com”. Edition.cnn.com. September 28, 2013. Retrieved 2013-12-12.
  10. Jump up to:a b “Mahmoud Ahmadinejad drops clue about Robert Levinson, ex-FBI agent who vanished 5 years ago in Iran”. CBS News. 2012-09-25.
  11. Jump up^ “Ex-FBI man in Iran not “missing” at all”. PressTV. 2007-04-04.
  12. Jump up^ “US sees Iran behind hostage photos of ex-FBI agent”. PAP. 2013-01-09.
  13. Jump up^ “U.S. woman plans trip to Iran to search for missing former FBI agent husband”. International Herald Tribune. 2007-08-02.
  14. Jump up^ “Iran: Missing American’s family can visit”CNN. September 23, 2007. Retrieved 2008-08-08.
  15. Jump up^ Fathi, Nazila (December 24, 2007). “In Iran, Search for American Yields Little”New York Times.
  16. Jump up^ Levinson, Daniel (June 22, 2008). “Missing a Father in Iran”The Washington Post. p. B07. Retrieved 2008-08-08.
  17. Jump up^ “Wife of ex-FBI agent to repeat Iran visit in search of her husband”Payvand. July 15, 2008. Retrieved 2008-08-08.
  18. Jump up^ “Transcript: ‘Response … will be a positive one'” (NBC Nightly News). msnbc.com. July 28, 2008. Retrieved 2008-08-08.
  19. Jump up^ “No ‘miracle’ for American missing in Iran”CNN. December 22, 2007.
  20. Jump up^ “Senator Says Former FBI Agent Who Vanished in 2007 Is in Secret Iran Prison”Fox News. January 13, 2009.
  21. Jump up^ Mackey, Robert (September 16, 2009). “Just Another American Hit Man, Actor and Journalist Living in Iran”.
  22. Jump up^ “Former FBI agent held in Iran: report”Reuters.
  23. Jump up^ “Statement by the Press Secretary on Robert Levinson”The White House.
  24. Jump up^ “John Kerry meets with family of ex-FBI agent missing in Iran”Reuters.
  25. Jump up to:a b “FBI — $1 Million Reward Offered for Missing Retired Agent”. Fbi.gov. Retrieved 2012-03-07.
  26. Jump up^ “FBI — Eight Year Anniversary of the Disappearance of Robert A. Levinson”FBI.
  27. Jump up^ ADAM GOLDMAN and MATT APUZZO Associated Press (2011-03-03). “Years After Vanishing in Iran, US Man Proven Alive – ABC News”. Abcnews.go.com. Retrieved 2011-12-09.
  28. Jump up^ “Robert Levinson, missing ex-FBI agent in hostage video: ‘Help me'”Associated Press. December 9, 2011.
  29. Jump up^ mwolda (Sep 27, 2013). Charlie Rose asks Rouhani about Robert Levinson. YouTube. Archived from the original on 2013-09-27. Retrieved 2013-12-12.
  30. Jump up^ “Son of captured American pleads for father’s release”Fox News.
  31. Jump up^ “Family Asks For Help Locating Man Possibly Missing In Iran”Daily Press. September 30, 2007.
  32. Jump up^ Deb Riechmann (11 May 2015). “Senate Passes Resolution for Release of Americans in Iran”. Archived from the original on May 28, 2015 – via washingtonpost.com.
  33. Jump up^ James, Risch, (20 May 2015). “S.Con.Res.16 – 114th Congress (2015-2016): A concurrent resolution stating the policy of the United States regarding the release of United States citizens in Iran”http://www.congress.gov.

External links

https://en.wikipedia.org/wiki/Robert_Levinson

 

 

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The Pronk Pops Show 985, Story 1: Fed Draining The Swamp — A Flattening Treasury Yield Curve Indicator of Possible Recession Especially If Republican Controlled Congress Fails To Totally and Completely Repeal and Replace Obamacare and Passes Trump’s Timid Tiny Targeted Temporary Tax Cut For Middle Class — Replace All Federal Taxes With A Broad Based Consumption Tax With Generous Tax Prebates And Balanced Budgets — FairTax or Fair Tax Less That Democrats, Republicans and Independents Would Pass — Otherwise Recession in 2018 –Videos

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Bond market flashing warning sign even as stocks rally to new highs

  • Bond pros are watching a phenomenon in the bond market that could signal recession ahead and trouble for the stock market.
  • The yield curve is flattening, meaning the spread between 2-year note yields and 10-year yields is narrowing, and at 0.75, it was the lowest since before the financial crisis.
  • Even though the move is a warning, strategists say some of the action has to do with the Fed reversing long-term easing policy and may not be a problem for stocks.

Bond market flashing warning sign even as stocks rally to new highs

Bond market flashing warning sign even as stocks rally to new highs  

The bond market is warning that trouble could be on the horizon, either from an economic slowdown or an eventual recession.

The yield curve, a set of interest rates watched closely by bond market pros, has gotten to its flattest level since before the financial crisis. The spread between 2-year note yields and 10-year yields this week reached near the lows, at about 0.75, it has been since before the financial crisis.

“It certainly is giving you some sort of signal in here. The signals are when the yield curve flattens, it tells you that inflation is not a problem and the Fed is doing something at the front end,” said David Ader, Informa Financial Intelligence chief macro strategist. “Historically, it signals a slowdown or recession.”

But with the Federal Reserve set to raise interest rates in December, and uncertainty about who the next Fed chief will be, there are also other concerns in the market, including that a new Fed head could be more hawkish and set the Fed on a more rapid rate-hiking course.

“It’s also telling you there could be a policy error in the Fed’s hiking particularly if they accelerate it,” said Ader. Bank of America Merrill Lynch’s monthly fund manager survey showed that fund managers in October believe the biggest risk for markets is a central bank policy misstep.

Treasurys on the move  

Some strategists say ignore it at your own peril, but others point to the fact that stocks can still rally when longer-duration interest rates are low but the short-term rate is rising.

The fear is that a flattening yield curve could lead to an inversion, meaning the short-end rate would actually go higher than the longer-end yield. That is typically viewed as a recession signal, and the flattening curve is a warning of that.

“Typically you eventually get to a much flatter yield that could lead to a recession,” said Peter Boockvar, chief market analyst with the Lindsey Group. “Right now it’s hard to get to inversion because of how actually low short-term interest rates are. You don’t need to get to the inversion this time.”

Jeff Gundlach, CEO of DoubleLine, weighed in on Twitter, pointing out that stock market bulls point to low rates as a positive, yet rates are climbing. The 2-year yield was at a new nine-year high Wednesday, touching 1.57 percent, while the 10-year was at 2.34 percent.

2 year Tsy yield back on the rise. Should accelerate w/ a close above 1.56%. Keep hearing SPX P/E OK due to low rates. But they are rising.

Strategists say years of quantitative easing by global central banks and extreme low interest rates cast doubt on some of the conventional wisdom about bond behavior. For instance, the Fed is also slowing down its purchases of Treasurys, mostly at the short end, and that could be influencing the behavior of the curve.

“I think it’s the expectation that further Fed tightening, whether it’s on the short end or it’s the quantitative tightening, is eventually going to slow the U.S. economy, and that’s what the yield curve is saying, while the stock market is drunk on hopes for tax reform,” Boockvar said. At the same time, expectations for a Fed rate hike at its December meeting continue to rise.

Wealth manager: bond markets are creating the 'biggest financial crisis of our lifetime'

Wealth manager: Bond markets are creating the ‘biggest financial crisis of our lifetime’  

Dallas Fed President Rob Kaplan said the low rate of the 10-year may not be because of easy financial conditions. “That may be a sign of worry about future growth,” Kaplan told reporters after participating on a panel with New York Fed President William Dudley about regional economic trends.

Source: Strategas Research

Todd Sohn, technical analyst at Strategas, looked at the behavior of the stock market during periods of flattening yield curves, and he found that until the curve actually inverted, stocks performed very well. In some cases, it took awhile for stocks to react when the curve inverted.

“It’s on our mind,” he said. “But until you get the inversion I don’t think we should put too much weight on it. Equity performance is still positive.”

Sohn said as the curve flattened between August 1977 and August 1978, for example, the S&P 500 gained 7 percent. But after the curve inverted in August 1978, the S&P corrected, falling about 14 percent from September to mid-November.

As the curve flattened between July 1988 and January 1989, the S&P was up 9 percent. But Sohn said after the curve inverted in January 1989, the S&P went uninterrupted until October 1989, when it corrected about 10 percent through February 1990. Then it saw a 20 percent correction from July 1990 to October 1990.

“The curve inversion in June 1998 saw a sharp 19 percent S&P correction from mid-July 1998 and the end of August 1998… before the race higher into the March 2000 peak,” he noted.

Just ahead of the financial crisis, the curve inverted in January 2006. There was a shallow 8 percent correction from May to June 2006, and stocks moved higher until October 2007.

“It’s very case-by-case but curve inversion does typically lead to some form of a correction,” Sohn noted. “We’re not there yet but just something worth keeping in mind.”

https://www.cnbc.com/2017/10/18/bond-market-flashing-warning-sign-even-as-stocks-rally-to-new-highs.html

Here’s how the Fed is flattening the yield curve

Published: Oct 18, 2017 2:42 p.m. ET

‘There is a sense that the market is getting ahead of itself’: BMO

Photo by Justin Sullivan/Getty Images
One way to flatten things.

By SUNNYOH

Traders betting on a steeper yield curve are being thwarted by two factors: a Federal Reserve intent on raising rates and lackluster inflation. This potent combination is making for the flattest yield curve by one measure in nearly a decade.

The yield curve is a line plotting the yields across Treasury maturities from the shortest dated to the longest, and can reflect investor expectations for growth and inflation. A flatter curve is seen as a sign investors are worried about growth.

SeeShould investors still worry if the yield curve sends this ominous signal?

After four rate increases in the current hiking cycle, the spread between the 5-year yield TMUBMUSD05Y, +2.22%   and the 30-year yield TMUBMUSD30Y, +1.78%   one way to assess the curve’s steepness, narrowed to 0.86 percentage point. The curve has flattened steadily since Donald Trump’s presidential election victory last November sparked a selloff in long-dated Treasurys on fears that his pro-growth agenda would spur inflation. Yields and bond prices move in opposite directions.

The dramatic speed of the flattening has surprised investors. In the past four tightening cycles, the gap between the 5-year yield and the 30-year yield narrowed on average by 0.98 percentage point. But after peaking at 3.02 percentage points in November 2010, the spread has tightened by 2.18 percentage points.

“There is a sense that the market is getting ahead of itself in the aggressiveness of the flattening currently underway,” wrote Ian Lyngen and Aaron Kohli, fixed-income strategists at BMO Capital Markets.

ReadInvestors fear a Fed policy misstep as central bank reaffirms rate-hike trajectory

Traders tend to concentrate on the spread between the 5-year yield and the 30-year yield versus other measures of the curve. The 5-year yield can serve as a more accurate reflection of market expectations for short-term rates than the 2-year yieldTMUBMUSD02Y, +2.41%  , which is largely under the central bank’s control, said Tim Alt, director of currencies and rates at Aviva Investors.

At the long end of the curve, the 30-year yield has slipped as inflation expectations weaken. Investors demand more of a yield premium when they fear inflation is on the rise because inflation erodes the purchasing power of future cash flows.

“It is the lack of inflation and anemic term premium that are exaggerating the move,” wrote Lyngen and Kohli. The term premium refers to the extra yield investors need to be compensated for buying a long-dated bond if short-term yields do not develop as expected.

The narrowing term premium reflects the newfound transparency of the Federal Reserve under Chairwoman Janet Yellen and former chairman Ben Bernanke, said Marvin Loh, senior fixed-income strategist at BNY Mellon.

Since the Fed’s September policy meeting, investors have been inundated with speeches from central bankers. Every voting member of the Fed’s interest-rate setting body has delivered public remarks, many more than once, giving market participants a clear idea of the central bank’s plans, as well as factors that could forestall the current tightening path.

On the flip side, the central bank’s push to telegraph its intentions have also helped power short-dated yields TMUBMUSD02Y, +2.41%   to their highest level since the recession. Dallas Fed President Robert Kaplan highlighted this trend, saying the central bank should raise rates one more time this year on Tuesday. The Federal Reserve has signaled further rate rises on the assumption that tightness in labor markets will spur wage growth and, in turn, inflation.

But inflation has been absent in recent months. The Fed’s preferred inflation measure, known as the personal consumption expenditures deflator, was 1.43% year-over-year in August, a steady descent from the five-year high of 2.18% notched in February.

Nonetheless, Yellen has tried to get ahead of the curve, adding to investors’ concerns that a lack of price pressures will not put off the central bank’s plan to see interest rates move higher.

Also readFed flunks econ 101: understanding inflation

http://www.marketwatch.com/story/heres-how-the-fed-is-flattening-the-yield-curve-2017-10-18

One Of These 3 Black Swans Will Likely Trigger A Global Recession By End Of 2018

 Opinions expressed by Forbes Contributors are their own.

Shutterstock

Exactly ten years ago, we were months way from a world-shaking financial crisis.

By late 2006, we had an inverted yield curve steep to be a high-probability indicator of recession. I estimated at that time that the losses would be $400 billion at a minimum. Yet, most of my readers and fellow analysts told me I was way too bearish.

Turned out the losses topped well over $2 trillion and triggered the financial crisis and Great Recession.

Conditions in the financial markets needed only a spark from the subprime crisis to start a firestorm all over the world. Plenty of things were waiting to go wrong, and it seemed like they all did at the same time.

We don’t have an inverted yield curve now. But when the central bank artificially holds down short-term rates, it is difficult, if not almost impossible, for the yield curve to invert.

We have effectively suppressed the biggest warning signal.

But there is another recession in our future (there is always another recession), which I think will ensue by the end of 2018. And it’s going to be at least as bad as the last one was in terms of the global pain it causes.

Below are three scenarios that may turn out to be fateful black swans. But remember this: A harmless white swan can look black in the right lighting conditions. Sometimes, that’s all it takes to start a panic.

Black Swan #1: Yellen Overshoots

It is clear that the U.S. economy is not taking off like the rocket some predicted after the election:

  • President Trump and the Republicans haven’t been able to pass any of the fiscal stimulus measures we hoped to see.
  • Banks and energy companies are getting some regulatory relief, and that helps, but it’s a far cry from the sweeping health care reform, tax cuts and infrastructure spending we were promised.
  • Consumer spending is still weak, so people may be less confident than the sentiment surveys suggest. Inflation has perked up in certain segments like health care and housing, but otherwise it’s still low to nonexistent.

Is this, by any stretch of the imagination, the kind of economy in which the Federal Reserve should be tightening monetary policy? No—yet the Fed is doing so.

It’s in part because they waited too long to end QE and to begin reducing their balance sheet. FOMC members know they are behind the curve, and they want to pay lip service to doing something before their terms end.

Plus, Janet Yellen, Stanley Fischer and the other FOMC members are religiously devoted to the Phillips curve.

The black-swan risk here is that the Fed will tighten too much, too soon.

We know from recent FOMC minutes that some members have turned hawkish in part because they wanted to offset expected fiscal stimulus from the incoming administration. That stimulus has not been coming, but the FOMC is still acting as if it will be.

What happens when the Fed raises interest rates in the early, uncertain stages of a recession instead of lowering them? Logic suggests the Fed will curb any inflation pressure that exists and push the economy into outright deflation.

Deflation in an economy as debt-burdened as ours could be catastrophic.

Let me make an uncomfortable prediction: I think the Trump Fed—and since Trump will appoint at least six members of the FOMC in the coming year, it will be his Fed—will take us back down the path of massive quantitative easing and perhaps even to negative rates if we enter a recession.

The urge to “do something,” or at least be seen as trying to do something, is just going to be too strong.

https://www.forbes.com/sites/johnmauldin/2017/07/27/one-of-these-3-black-swans-will-likely-trigger-a-global-recession-by-end-of-2018/#520a1131875f

4 Non-Reasons For Recession In 2018

 Opinions expressed by Forbes Contributors are their own.

Forecasts of a recession next year are nothing new. In early 2016, I noticed analysts saying we might are already be in recession. One source quoted perennial bear Peter Schiff, another interviewed Jim Grant, and gold bug David Haggith wrote that we definitely were in recession. Not only did 2016 turn out to be not a recession, but it looks like 2017 won’t be either.

Dr. Bill Conerly based on Wall Street Journal survey.

Risk of Recession

Recessions don’t just happen randomly, nor do they occur because the expansion is old, nor do they come about because a certain person is in the White House. There is always a trigger, so we’ll go through the usual causes of recession.

1. Overly tight monetary policy is the most common cause of recession, but is unlikely right now. Here in the United States, the Federal Reserve caused or played a large role in the recessions of 1973-74, 1980, 1982, 1990 and 2001. I’ve heard it argued monetary policy was overly tight in 2008, but I don’t buy that as the cause of that recession, but perhaps the cause of the anemic recovery.

 Risk of Recession

Could monetary policy be tight enough to trigger a recession in 2018? Keep in mind that monetary policy acts with long time lags, so a December rate hike wouldn’t do much damage in the following year. The Fed’s rate hikes this year total one-half a percentage point, with perhaps one or two more on the way. (That’s the Fed’s own guess; mine is no more rate hikes this year.)

When the Fed moves strongly, it pushes short-term interest rates about three percentage points in a year. (1969, 1973, 1979, 1981, 1989) In the past six months, short-term interest rates have risen three-quarters of a percent—hardly a recessionary change.

 Yield curve June 2017 and 2016
Dr. Bill Conerly based on Federal Reserve data.

Yield curve June 2017 and 2016

The yield curve is a common expression of monetary policy and works pretty well as a predictive indicator. When interest rates are plotted against time to maturity—one month Treasury notes on the left and 30-year bonds on the right—then the shape of the curve is a good leading indicator. The normal shape is for the curve to rise, meaning higher interest rates are paid on bonds of longer maturity. Recessions are frequently preceded by an inverted yield curve, meaning short-term interest rates are higher than long-term interest rates. Right now the curve is very normal, and the last year’s shift upward has been an almost parallel move, with little change in the relationship between short-term rates and long-term rates. I see no recession coming from tight monetary policy, at least in the usual way.

The unusual way relates to the Fed’s reduction of its holdings of long-term securities, which will push interest rates up. This is uncharted territory. As the Fed had never before engaged in massive quantitative easing, it also never unwound a past massive easing. Two considerations are in order. First, the Fed won’t be too aggressive in its unwinding. If they see their actions pushing up long-term interest rates too quickly, they will hold off on further asset sales. Worrying about time lags—that the Fed won’t see their errors soon enough to ward off recession—makes senses, but it’s not certain.

The second consideration is that long-term interest rates are determined globally, by the world’s demand for credit compared to its supply of savings. The U.S is a big part of the global financial market, but it’s not the whole thing.

https://www.forbes.com/sites/billconerly/2017/07/19/4-non-reasons-for-recession-in-2018/#19da4731616c

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The Pronk Pops Show 981, October 11, 2017, Story 1: Major Bubble and Major Bust When Congress Fails To Pass Both Fundamental Tax Reform and Total Repeal and Replacement of Obamacare — Results Count — Trump Runs Against The Do Nothing Congress of Democrats and Republicans in 2020 –American People vs. Political Elitist Establishment — Golden Opportunity Missed and Replaced By Smoke and Mirror Postcard Propaganda For Timid Tiny Tax Cut and Fake Repeal of Obamacare — Trump Narrowly Wins Second Term — National Debt Hits $25 Trillion & Unfunded Liabilities Hit $250 Trillion By 2024 –Videos — Story 2: How Obama Destroyed The Democratic and Damaged The U.S. Economy — Will Trump Reform The Republican Party and Revive The U.S. Economy — Videos

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Story 1: Major Bubble and Major Bust When Congress Fails To Pass Both Fundamental Tax Reform and Total Repeal and Replacement of Obamacare — Good Intentions No Substitute For Results —  Golden Opportunity Missed and Replaced By Smoke and Mirror Tax Return Postcard and Spending Cuts Propaganda Spin For Timid Tiny Tax Cut and Fake Repeal of Obamacare — Trump Runs Against The Do Nothing Congress of Democrats and Republicans in 2020 –American People and Trump vs. Political Elitist Establishment —  Trump Narrowly Wins Second Term — National Debt Hits $25 Trillion & Unfunded Liabilities or Obligations Hit $250 Trillion By 2024 –Videos —

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2018 United States federal budget

From Wikipedia, the free encyclopedia
2018 Budget of the United States federal government
Submitted March 16, 2017
Submitted by Donald Trump
Submitted to 115th Congress
Total revenue $3.654 trillion
Total expenditures $4.094 trillion[1]
Deficit $440 billion
GDP $20,237 billion
Website https://www.whitehouse.gov/omb/budget
‹ 2017

The United States federal budget for fiscal year 2018, named America First: A Budget Blueprint to Make America Great Again, was the first budget proposed by newly-elected President Donald Trump, submitted to the 115th Congress on March 16, 2017. If passed, the $4.1 trillion budget will fund government operations for fiscal year 2018, which runs from October 1, 2017 to September 30, 2018.[2][3]

Background

Donald Trump was elected as President of the United States during the November 8, 2016 elections, campaigning for the Republican Party on a platform of tax cuts and projects like the Mexican border wall. During his campaign, Trump promised to cut federal spending and taxes for individuals and corporations.

Trump administration budget proposal

The Trump administration proposed its 2018 budget on February 27, 2017, ahead of his address to Congress, outlining $54 billion in cuts to federal agencies and an increase in defense spending.[4] On March 16, 2017, President Trump sent his budget proposal to Congress, remaining largely unchanged from the initial proposal.[5]

CBO scoring of the budget

CBO chart explaining the impact of the 2018 budget on spending, tax revenue, and deficits over the 2018–2027 periods.

The Congressional Budget Office reported its evaluation of the budget on July 13, 2017, including its effects over the 2018–2027 period.

  • Mandatory spending: The budget cuts mandatory spending by a net $2,033 billion (B) over the 2018–2027 period. This includes reduced spending of $1,891B for healthcare, mainly due to the proposed repeal and replacement of the Affordable Care Act (ACA/Obamacare); $238B in income security (“welfare”); and $100 billion in reduced subsidies for student loans. This savings would be partially offset by $200B in additional infrastructure investment.
  • Discretionary spending: The budget cuts discretionary spending by a net $1,851 billion over the 2018–2027 period. This includes reduced spending of $752 billion for overseas contingency operations (defense spending in Afghanistan and other foreign countries), which is partially offset by other increases in defense spending of $448B, for a net defense cut of $304B. Other discretionary spending (cabinet departments) would be reduced by $1,548B.
  • Revenues would be reduced by $1,000B, mainly by repealing the ACA, which had applied higher tax rates to the top 5% of income earners. Trump’s budget proposal was not sufficiently specific to score other tax proposals; these were simply described as “deficit neutral” by the Administration.
  • Deficits: CBO estimated that based on the policies in place as of the start of the Trump administration, the debt increase over the 2018–2027 period would be $10,112B. If all of President Trump’s proposals were implemented, CBO estimated that the sum of the deficits (debt increases) for the 2018–2027 period would be reduced by $3,276B, resulting in $6,836B in total debt added over the period.[6]
  • CBO estimated that the debt held by the public, the major subset of the national debt, would rise from $14,168B (77.0% GDP) in 2016 to $22,337B (79.8% GDP) in 2027 under the President’s budget.[7]

Department and program changes

The proposed 2018 budget includes $54 billion in cuts to federal departments, and a corresponding increase in defense and military spending.[8][9]

Department Budget Amount change Percent change Notes
Department of Agriculture $17.9 billion $-4.7 billion −21% Includes the elimination of food for education and water and wastewater loan programs. Decreases funding for the United States Forest Service by $118 million.[10]
Department of Commerce $7.8 billion $−1.4 billion −16% Includes cuts to coastal research programs at the National Oceanic and Atmospheric Administration, and the elimination of the Economic Development Administration
Department of Defense $574 billion $52 billion +9% Includes an increase in the size of the Army and Marine Corps, as well as the Naval fleet
Department of Education $68.2 billion $−9.2 billion −14% Cuts programs and grants for teacher training, after-school and summer care, and aid to low-income students. Eliminates $1.2 from the 21st Century Community Learning Center program and cuts $732 million from the Federal Supplemental Educational Opportunity Grant. Eliminates Striving Readers/Comprehensive Literacy Development Grants as well as cuts funding for Supporting Effective Instruction State grants by $2.3 billion[11].
Department of Energy $28 billion $−1.7 billion −6% Largest cuts go to the Office of ScienceARPA-E and Departmental Loan Programs eliminated. Increases spending on National Nuclear Security Administration by 11.4% while slashing high energy physics and almost all other science programs (Basic Energy Sciences, Biological and Environmental Research, Fusion Energy Sciences, High Energy Physics, Nuclear Physics, Infrastructure and Administration, Workforce Development for Teachers and Scientists) by 18%. The only science program not to receive a cut is the Advanced Scientific Computing Research program, which is to receive a small budget increase of $101 million. Money spent on the NNSA would go to the modernization and upkeep of nuclear weapons as well as $1.5 billion going to naval nuclear reactors. The budget cuts funding for energy programs by over 50% reducing the funding by $2.4 billion. Energy programs cut include: Energy Efficiency and Renewable Energy, Electricity Delivery and Energy Reliability, Nuclear Energy, Fossil Energy Research and Development.[12][13]
Department of Health and Human Services $65.1 billion $−15.1 billion −18% Cuts funding for the National Institutes of Health and training programs
Department of Homeland Security $44.1 billion $2.8 billion +7% Increases spending on border security and immigration enforcement and builds a wall on the US-Mexico border. Cuts funding for certain FEMA grant programs.
Department of Housing and Urban Development $40.7 billion $−6.2 billion −13% Eliminates grant programs for community development, investment partnerships, home-ownership, and Section 4 affordable housing
Department of the Interior $11.7 billion $−1.6 billion −12% Eliminates over 4000 jobs. Eliminates funding for 49 National Historic Sites and decreases funding for land acquisition. Decreases funding for Cooperative Endangered Species Conservation Fund. Cuts funding by $2 million for dealing with invasive species.[14][15]
Department of Justice $27.7 billion $−1.1 billion −4% Reduces spending on prison construction and reimbursements to state and local governments for incarceration of undocumented immigrants
Department of Labor $9.6 billion $−2.6 billion −21% Eliminates funding for senior-work programs, grants for non-profits and public agencies used for health training, and closes some Job Corps centers
State Department $27.1 billion $−10.9 billion −29% Eliminates funding for United Nations programs, including peacekeeping and climate change mitigation
Department of Transportation $16.2 billion $−2.4 billion −13% Eliminates funding for the Federal Transit Administration‘s New Starts grant program, long-distance Amtrak service, cuts the TIGER grant program and eliminates funding for the Essential Air ServiceAir traffic control would be shifted to private service under the proposal.
Treasury Department $11.2 billion $−0.5 billion −4% Reduces funding for the Internal Revenue Service
Department of Veteran Affairs $78.9 billion $4.4 billion +6% Expands health services and the benefit claims system. Slashes disability benefits to 225,000 elderly veterans. The VA currently provides additional disability compensation benefits to Veterans, irrespective of age, who it deems unable to obtain or maintain gainful employment due to their service-connected disabilities through a program called Individual Unemployability (IU). The IU program is a part of VA’s disability compensation program that allows VA to pay certain Veterans disability compensation at the 100 percent rate, even though VA has not rated their service-connected disabilities at the total level. These Veterans have typically received an original disability ratings between 60 and 100 percent. Under this proposal, Veterans eligible for Social Security retirement benefits would have their IU terminated upon reaching the minimum retirement age for Social Security purposes, or upon enactment of the proposal if the Veteran is already in receipt of Social Security retirement benefits.These Veterans would continue to receive VA disability benefits based on their original disability rating, at the scheduler evaluation level. IU benefits would not be terminated for Veterans who are ineligible for Social Security retirement benefits, thus allowing them to continue to receive IU past minimum retirement age. Savings to the Compensation and Pensions account are estimated to be $3.2 billion in 2018, $17.9 billion over five years, and $40.8 billion over ten years.[16]
Environmental Protection Agency $5.7 billion $−2.5 billion −31% Eliminates more than 50 programs and 3,200 jobs
National Aeronautics and Space Administration(NASA) $19.1 billion $-0.1 billion −1% Cuts funding for Earth science programs and missions, and eliminates the Office of Education. Cuts funding for the Aeronautics Research Mission Directorate by $166 million (−21%). Cuts funding for Space Technology research by $148.4 million (−18%). Cuts funding for Human Exploration Operations by $4478.9 million (−53%). Cuts funding for the Education program by $62.7 million (−62.7%).[17][18]
Small Business Administration $.8 billion $−0.1 billion −5% Eliminates technical-assistance grant programs

The $971 million budget for arts and cultural agencies, including the Corporation for Public BroadcastingNational Endowment for the Arts, and National Endowment for the Humanities, would be eliminated entirely.

Criticism

Economist Joseph Stiglitz said about the 2018 budget proposal: “Trump’s budget takes a sledgehammer to what remains of the American Dream”. Senator Bernie Sanders also criticized the proposal: “This is a budget which says that if you are a member of the Trump family, you may receive a tax break of up to $4 billion, but if you are a child of a working-class family, you could well lose the health insurance you currently have through the Children’s Health Insurance Program and massive cuts to Medicaid”.[19]

Related fiscal legislation

On September 8, 2017, Trump signed the Continuing Appropriations Act, 2018 and Supplemental Appropriations for Disaster Relief Requirements Act, 2017. The bill contained a continuing resolution and a suspension of the debt ceiling lasting until December 8, as well as additional disaster funding for FY2017.[20][21]

References

Employment Situation Summary Table A. Household data, seasonally adjusted

HOUSEHOLD DATA
Summary table A. Household data, seasonally adjusted
[Numbers in thousands]
Category Sept.
2016
July
2017
Aug.
2017
Sept.
2017
Change from:
Aug.
2017-
Sept.
2017

Employment status

Civilian noninstitutional population

254,091 255,151 255,357 255,562 205

Civilian labor force

159,830 160,494 160,571 161,146 575

Participation rate

62.9 62.9 62.9 63.1 0.2

Employed

151,926 153,513 153,439 154,345 906

Employment-population ratio

59.8 60.2 60.1 60.4 0.3

Unemployed

7,904 6,981 7,132 6,801 -331

Unemployment rate

4.9 4.3 4.4 4.2 -0.2

Not in labor force

94,261 94,657 94,785 94,417 -368

Unemployment rates

Total, 16 years and over

4.9 4.3 4.4 4.2 -0.2

Adult men (20 years and over)

4.6 4.0 4.1 3.9 -0.2

Adult women (20 years and over)

4.4 4.0 4.0 3.9 -0.1

Teenagers (16 to 19 years)

15.9 13.2 13.6 12.9 -0.7

White

4.4 3.8 3.9 3.7 -0.2

Black or African American

8.3 7.4 7.7 7.0 -0.7

Asian

3.9 3.8 4.0 3.7 -0.3

Hispanic or Latino ethnicity

6.4 5.1 5.2 5.1 -0.1

Total, 25 years and over

4.1 3.6 3.8 3.5 -0.3

Less than a high school diploma

8.5 6.9 6.0 6.5 0.5

High school graduates, no college

5.2 4.5 5.1 4.3 -0.8

Some college or associate degree

4.2 3.7 3.8 3.6 -0.2

Bachelor’s degree and higher

2.5 2.4 2.4 2.3 -0.1

Reason for unemployment

Job losers and persons who completed temporary jobs

3,930 3,378 3,523 3,359 -164

Job leavers

900 757 804 738 -66

Reentrants

2,327 2,083 2,132 2,079 -53

New entrants

802 703 656 669 13

Duration of unemployment

Less than 5 weeks

2,584 2,133 2,222 2,226 4

5 to 14 weeks

2,220 2,017 2,015 1,874 -141

15 to 26 weeks

1,164 957 1,055 963 -92

27 weeks and over

1,963 1,785 1,740 1,733 -7

Employed persons at work part time

Part time for economic reasons

5,874 5,282 5,255 5,122 -133

Slack work or business conditions

3,587 3,161 3,266 3,121 -145

Could only find part-time work

1,972 1,754 1,645 1,733 88

Part time for noneconomic reasons

20,742 21,260 21,447 21,011 -436

Persons not in the labor force (not seasonally adjusted)

Marginally attached to the labor force

1,844 1,629 1,548 1,569

Discouraged workers

553 536 448 421

– Over-the-month changes are not displayed for not seasonally adjusted data.
NOTE: Persons whose ethnicity is identified as Hispanic or Latino may be of any race. Detail for the seasonally adjusted data shown in this table will not necessarily add to totals because of the independent seasonal adjustment of the various series. Updated population controls are introduced annually with the release of January data.

Employment Situation Summary Table B. Establishment data, seasonally adjusted

ESTABLISHMENT DATA
Summary table B. Establishment data, seasonally adjusted
Category Sept.
2016
July
2017
Aug.
2017(P)
Sept.
2017(P)

EMPLOYMENT BY SELECTED INDUSTRY
(Over-the-month change, in thousands)

Total nonfarm

249 138 169 -33

Total private

223 133 164 -40

Goods-producing

11 -20 66 9

Mining and logging

0 0 6 2

Construction

23 -9 19 8

Manufacturing

-12 -11 41 -1

Durable goods(1)

-10 -18 33 4

Motor vehicles and parts

-5.2 -27.1 23.9 -3.2

Nondurable goods

-2 7 8 -5

Private service-providing

212 153 98 -49

Wholesale trade

13.3 4.3 1.8 6.7

Retail trade

27.3 -10.8 -7.3 -2.9

Transportation and warehousing

-1.7 7.7 8.0 21.8

Utilities

0.5 -0.7 -0.3 0.0

Information

8 -3 -4 -9

Financial activities

9 11 8 10

Professional and business services(1)

83 43 43 13

Temporary help services

29.5 12.9 7.5 5.9

Education and health services(1)

48 51 45 27

Health care and social assistance

23.6 38.2 20.9 13.1

Leisure and hospitality

11 50 0 -111

Other services

13 1 4 -5

Government

26 5 5 7

(3-month average change, in thousands)

Total nonfarm

239 164 172 91

Total private

205 164 168 86

WOMEN AND PRODUCTION AND NONSUPERVISORY EMPLOYEES
AS A PERCENT OF ALL EMPLOYEES(2)

Total nonfarm women employees

49.6 49.5 49.5 49.5

Total private women employees

48.2 48.1 48.1 48.1

Total private production and nonsupervisory employees

82.3 82.4 82.4 82.4

HOURS AND EARNINGS
ALL EMPLOYEES

Total private

Average weekly hours

34.4 34.4 34.4 34.4

Average hourly earnings

$25.81 $26.39 $26.43 $26.55

Average weekly earnings

$887.86 $907.82 $909.19 $913.32

Index of aggregate weekly hours (2007=100)(3)

105.8 107.2 107.4 107.3

Over-the-month percent change

0.5 -0.2 0.2 -0.1

Index of aggregate weekly payrolls (2007=100)(4)

130.6 135.3 135.7 136.2

Over-the-month percent change

0.8 0.3 0.3 0.4

DIFFUSION INDEX
(Over 1-month span)(5)

Total private (261 industries)

57.9 63.2 60.2 55.7

Manufacturing (78 industries)

39.7 60.9 66.0 50.0

Footnotes
(1) Includes other industries, not shown separately.
(2) Data relate to production employees in mining and logging and manufacturing, construction employees in construction, and nonsupervisory employees in the service-providing industries.
(3) The indexes of aggregate weekly hours are calculated by dividing the current month’s estimates of aggregate hours by the corresponding annual average aggregate hours.
(4) The indexes of aggregate weekly payrolls are calculated by dividing the current month’s estimates of aggregate weekly payrolls by the corresponding annual average aggregate weekly payrolls.
(5) Figures are the percent of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment.
(P) Preliminary

NOTE: Data have been revised to reflect March 2016 benchmark levels and updated seasonal adjustment factors.

 

The Tax Reform Tipping Point

Breitbart’s Steve Bannon is lighting up media coverage by championing primaries, but GOP operatives are more concerned with snagging a legislative win to calm the growing strife.

By David Catanese, Senior Politics Writer |Oct. 11, 2017, at 5:32 p.m.

The Tax Reform Tipping Point

What Bannon’s Civil War on the GOP Means for Tax Reform
Bloomberg
 Republican strategists and activists increasingly fear that a failure to deliver on tax reformin the coming months will intensify primary challenges to sitting incumbents next year and imperil the party’s already precarious standing in the midterm elections.

Angry GOP donors, a restless conservative base, a standstill Congress and a uniquely impetuous president are raising the stakes for a fourth-quarter legislative agenda that will be largely defined by an attempt at revamping the tax code that has languished for months.

An outside insurrection by Breitbart News head and former White House chief strategist Steve Bannon already is ominously fanning the flames of internecine warfare. But many top Republican minds believe the most powerful tipping point for the GOP is whether it can deliver on Trump’s key campaign promise of producing tax relief for Americans.

“If Congress passes the key elements of the conservative agenda, including repealing Obamacare and cutting taxes, some of the anger at the grass roots will dissipate,” says Ralph Reed, founder and chairman of the Faith & Freedom Coalition. “But if Congress fails to do so, I think there will be a lot of primaries in 2018 and 2020, and I think there will be a lot of vulnerable incumbents.”

Saddled by multiple failed attempts to repeal former President Barack Obama’s health care law, President Donald Trump and congressional Republicans are now turning their concerted attention to pitching lower tax rates and a simplification of the filing system. But there’s a growing realization they are now up against a calendar that leaves only two and a half months until an election year – and some of the most fiery activists already have lost their patience.

President Trump To Advance Tax Reform Plan
CBS New York
 The latest evidence of intraparty unrest came Wednesday in the form of a blistering letter from leading conservative groups asking Senate Majority Leader Mitch McConnell and members of his leadership team to step aside, citing their failure to act on an array of issues from illegal immigration and deficit spending to Planned Parenthood funding and a repeal of the Affordable Care Act.

“Republicans were given full control of the federal government. They – you – have done nothing,” the letter reads. “Worse, it is painfully clear that you intend to do nothing because, as is most apparent, you had no intention of honoring your solemn commitments to the American people. You were not going to drain the swamp. You are the swamp.”

The searing missive was signed by Ken Cuccinelli, president of the Senate Conservatives Fund; Jenny Beth Martin, co-founder of Tea Party Patriots; Adam Brandon, president of FreedomWorks; David Bozell, president of ForAmerica; Brent Bozell, chairman of ForAmerica; and conservative activist Richard Viguerie.

The cadre also questioned McConnell’s “commitment to real reform” on taxes – and a key GOP member of the House Ways and Means Committee on Wednesday acknowledged lawmakers will have to settle for at least some changes that won’t be permanent. “We’re not going to do as well as we had hoped in terms of permanence. It’s obvious,” said Rep. Pete Roskam of Illinois.

Meanwhile, even as Bannon’s clarion call for primary challengers to half a dozen GOP Senate incumbents has shaken the political media establishment as he intended, many GOP campaign veterans privately contend his influence has been widely overblown.

Plenty of anti-establishment candidates and would-be contenders mulling 2018 bids were stirring the pot long before Bannon came along. Alabama’s Roy Moore, for example, was beating Sen. Luther Strange ahead of Bannon’s blessing. Arizona’s Kelli Ward had run in 2016 against Sen. John McCain, and shortly after that defeat switched her focus to Sen. Jeff Flake.

 Mississippi’s Chris McDaniel, who is inching closer to a challenge of GOP Sen. Roger Wicker, gained national notoriety in 2014 for falling barely short in his bid to unseat Sen. Thad Cochran.

Bannon is also in talks with potential challengers to Sen. John Barrasso in Wyoming and Sen. Orrin Hatch in Utah, but so far neither has drawn a formal primary opponent, and Hatch hasn’t even formally decided to run again. In Nebraska, one key GOP player mocked any Bannon effort to draft a candidate to run against first-term Sen. Deb Fischer. “There’s really not any anti-Deb sentiment in Nebraska,” says Mike Kennedy, a 25-year GOP activist from Omaha. “I don’t see any traction for Bannon at all. They’re going to have to look under a lot of rocks.”

“Let’s be honest: Steve’s a drum major desperately running in front of a parade,” says a prominent conservative activist, speaking anonymously because he counts Bannon as a friend. “He’s good copy. He’s a good story. The issue is not Bannon. The issue is what these people were told for eight years: That when we got the White House, the Senate and the House, this stuff was going to happen. The grass roots feel like they’ve been played.”

“If we don’t pass the tax cut, I think all bets are off,” the activist adds, referring to the number of ferocious primaries that could multiply across the map.

Strategists working to preserve and expand the 52-member Republican Senate majority are also pinning their hopes on tax reform to hand their incumbents a tangible accomplishment that will land in voters’ pocketbooks. At the same time, they know it stands to impact their own bottom lines.

 A Senate GOP source acknowledges fundraising has begun to lag since June and that the National Republican Senatorial Committee – the entity tasked with electing GOP senators – has spent more than it’s raised over the preceding two months.

“Donors are so pissed off,” the source says. “If we don’t get tax reform, we won’t have the money to fund all our races. They just don’t understand why nothing’s been done.”

Terry Schilling, executive director of conservative think tank the American Principles Project, agrees that Republicans need an accomplishment on tax reform that they can hold in front of voters next year.

But unlike others, he doesn’t view Bannon’s efforts as necessarily counterproductive. Instead, Schilling says, Bannon’s looming threat of outside fire provides a constant incentive for even the most dependable incumbents to make good on Trump’s agenda.

“It’s probably not fair to target Barrasso, but then Barrasso gets to go to [John] McCain and [Lisa] Murkowski and [Susan] Collins and say, ‘I’m your friend and I’m getting heartburn for this.’ It’s pressure; it’s just politics,” he says. “These incumbents better be able to point to how they’ve been supportive of Trump. Otherwise, they’re going to be Luther Strange.”

https://www.usnews.com/news/the-run/articles/2017-10-11/tax-reform-key-to-republicans-fate-in-2018-midterms

Story 2: How Obama Destroyed The Democratic and Damaged The U.S. Economy — Will Trump Reform The Republican Party and Revive The U.S. Economy? — Videos

Victor D. Hanson: How the Obama Presidency Destroyed Todays Democratic Party

Taking Stock of Trumpism: Where It Came From, What It Has Accomplished, and Where It Is Going

Victor D. Hanson: The Media Hysteria over Trump | and the Reality

Victor D. Hanson on Obama’s Last Year & the Problem w/ Elites in Society

VICTOR DAVIS HANSON FULL ONE-ON-ONE EXPLOSIVE INTERVIEW WITH TUCKER CARLSON (6/9/2017)

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The Pronk Pops Show 974, September 28, 2017, Part 2 of 3, Story 1: The Tiny Timid Trump Tax Reform Resembles Liberal Democratic Party Proposals vs. Fair Tax Less Would Replace All Federal Taxes With A Single Consumption Tax On What You Buy Not What You Earn With A Generous Tax Prebate and Future Government Spending Limited To 90% of Fair Tax Less Revenues — Affordable, Effective, Efficient, Fair, Reasonable, Simple, and Transparent With Progressive Effective Rates Due To A Generous Monthly $1,000 Per Month or $12,000 Per Year Tax Prebate For All Adult American Citizens — American Friendly Not Revenue Neutral — Balanced Budgets With Real Spending Cuts and No More Budget Deficits — Booming Economy With Jobs, Jobs, and Jobs — The Time Is Now or Never For Fair Tax Less — Videos

Posted on September 29, 2017. Filed under: American History, Banking System, Blogroll, Breaking News, Budgetary Policy, Cartoons, Comedy, Communications, Congress, Countries, Culture, Defense Spending, Donald J. Trump, Donald Trump, Economics, Education, Empires, Employment, First Amendment, Fiscal Policy, Foreign Policy, Fourth Amendment, Freedom of Speech, Government, Government Dependency, Government Spending, Hate Speech, Health Care, Health Care Insurance, History, House of Representatives, Labor Economics, Medicare, Monetary Policy, Second Amendment, Senate, Social Networking, Social Security, Success, Tax Policy, Taxation, Taxes, Technology, Trade Policy, Unemployment, United States Constitution, United States of America, Videos, Wall Street Journal, Wealth, Welfare Spending, Wisdom | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

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The Pronk Pops Show Podcasts

Pronk Pops Show 974, September 28, 2017

Pronk Pops Show 973, September 27, 2017

Pronk Pops Show 972, September 26, 2017

Pronk Pops Show 971, September 25, 2017

Pronk Pops Show 970, September 22, 2017

Pronk Pops Show 969, September 21, 2017

Pronk Pops Show 968, September 20, 2017

Pronk Pops Show 967, September 19, 2017

Pronk Pops Show 966, September 18, 2017

Pronk Pops Show 965, September 15, 2017

Pronk Pops Show 964, September 14, 2017

Pronk Pops Show 963, September 13, 2017

Pronk Pops Show 962, September 12, 2017

Pronk Pops Show 961, September 11, 2017

Pronk Pops Show 960, September 8, 2017

Pronk Pops Show 959, September 7, 2017

Pronk Pops Show 958, September 6, 2017

Pronk Pops Show 957, September 5, 2017

Pronk Pops Show 956, August 31, 2017

Pronk Pops Show 955, August 30, 2017

Pronk Pops Show 954, August 29, 2017

Pronk Pops Show 953, August 28, 2017

Pronk Pops Show 952, August 25, 2017

Pronk Pops Show 951, August 24, 2017

Pronk Pops Show 950, August 23, 2017

Pronk Pops Show 949, August 22, 2017

Pronk Pops Show 948, August 21, 2017

Pronk Pops Show 947, August 16, 2017

Pronk Pops Show 946, August 15, 2017

Pronk Pops Show 945, August 14, 2017

Pronk Pops Show 944, August 10, 2017

Pronk Pops Show 943, August 9, 2017

Pronk Pops Show 942, August 8, 2017

Pronk Pops Show 941, August 7, 2017

Pronk Pops Show 940, August 3, 2017

Pronk Pops Show 939, August 2, 2017

Pronk Pops Show 938, August 1, 2017

Pronk Pops Show 937, July 31, 2017

Pronk Pops Show 936, July 27, 2017

Pronk Pops Show 935, July 26, 2017

Pronk Pops Show 934, July 25, 2017

Pronk Pops Show 934, July 25, 2017

Pronk Pops Show 933, July 24, 2017

Pronk Pops Show 932, July 20, 2017

Pronk Pops Show 931, July 19, 2017

Pronk Pops Show 930, July 18, 2017

Pronk Pops Show 929, July 17, 2017

Pronk Pops Show 928, July 13, 2017

Pronk Pops Show 927, July 12, 2017

Pronk Pops Show 926, July 11, 2017

Pronk Pops Show 925, July 10, 2017

Pronk Pops Show 924, July 6, 2017

Pronk Pops Show 923, July 5, 2017

Pronk Pops Show 922, July 3, 2017

Pronk Pops Show 921, June 29, 2017

Pronk Pops Show 920, June 28, 2017

Pronk Pops Show 919, June 27, 2017

Pronk Pops Show 918, June 26, 2017

Pronk Pops Show 917, June 22, 2017

Pronk Pops Show 916, June 21, 2017

Pronk Pops Show 915, June 20, 2017

Pronk Pops Show 914, June 19, 2017

Pronk Pops Show 913, June 16, 2017

Pronk Pops Show 912, June 15, 2017

Pronk Pops Show 911, June 14, 2017

Pronk Pops Show 910, June 13, 2017

Pronk Pops Show 909, June 12, 2017

Pronk Pops Show 908, June 9, 2017

Pronk Pops Show 907, June 8, 2017

Pronk Pops Show 906, June 7, 2017

Pronk Pops Show 905, June 6, 2017

Pronk Pops Show 904, June 5, 2017

Pronk Pops Show 903, June 1, 2017

Image result for Donald Trump Plan Tax BracketsImage result for trump's tax frameworkImage result for fairtax Corporations paying fewer taxesImage result for fairtax Image result for trump's tax framework

 

Image result for trump's new tax plan compared with current tax system

 

Part 2 of 3, Story 1: The Tiny Timid Trump Tax Reform Resembles Liberal Democratic Party Proposals vs. Fair Tax Less Would Replace All Federal Taxes With A Single Consumption Tax On What You Buy Not What You Earn With A Generous Tax Prebate and Future Government Spending Limited To 90% of Fair Tax Less Revenues — Affordable, Effective, Efficient, Fair, Reasonable, Simple, and Transparent With Progressive Effective Rates Due To A Generous Monthly $1,000 Per Month or $12,000 Per Year Tax Prebate For All Adult American Citizens — American Friendly Not Revenue Neutral — Balanced Budgets With Real Spending Cuts and No More Budget Deficits — Booming Economy With Jobs, Jobs, and Jobs — The Time Is Now or Never For Fair Tax Less — Videos

The American People Want The FairTax 

Espeicially The New Improved Version — Fair Tax Less

Demand Fair Tax Less From Your Elected Representatives and President Trump

FairTax: Fire Up Our Economic Engine (Official HD)

Image result for Fair Tax Replaces


Inside the GOP’s tax blueprint

Mulvaney: Impossible to say tax benefit to rich – NEWS TODAY

Mick Mulvaney defends Trump’s Puerto Rico response, tax plan

Treasury secretary on Trump administration’s new tax plan

“IT WOULD BE LIKE HOUDINI!!!” Chuck Todd’s BRILLIANT Takedown of Trump Lackey Steven Mnuchin |News

Newt Gingrich with Martha MacCallum on Donald Trump Tax Reform Plan. #NewtGingrich #TaxReform #POTUS

LIMBAUGH: Trump’s Tax Plan Is NOT A Tax Break For The Rich

Middle Class Will ‘Get Nothing’ In Tax Proposal: Steve Rattner | Morning Joe | MSNBC

What Democrats don’t like about Trump’s tax reform plan

Milton Friedman – Why Tax Reform Is Impossible

🔴 Ep. 287: Pros and Cons of the Trump Tax Plan

Trump pitches tax reform plan to manufacturers

Sen. John Kennedy on Tax Reform

Speaker Ryan Previews Unified Framework for Tax Reform

Trump pushes first tax overhaul since President Reagan

Trump tax reform is very pro-growth: Norquist

Who wins and loses in the GOP’s proposed tax overhaul

President Trump Unveils STUNNING Tax Plan | Full Speech 9/27/17

President Donald Trump unveils his ‘middle class miracle’, a stunning tax plan with three brackets, zero tax on couples’ first $24,000 and a massive corporate rate slash. ‘The largest tax cut in American History.’ MAGA 🇺🇸

Milton Friedman – Is tax reform possible?

Ep. 287: Pros and Cons of the Trump Tax Plan

What Trump’s tax plan could mean for workers and businesses

Trump’s tax plan mirrors Ronald Reagan’s

PRESIDENT TRUMP UNVEILS SWEEPING TAX PLAN

Chuck Schumer SLAMS Trump’s New Tax Reform Plan on his Press Conference 9/27/2017

Inside Politics 09/27/17: TRUMP TAX PLAN COULD COST $5 TRILLION

Rush Limbaugh 09/27/2017 | Trump tax plan isn’t conservative, it’s populist, raises taxes on rich

Hannity: Trump’s tax plan is designed to grow the economy

Analyzing President Trump’s tax plan

Trump Unveils Tax Plan: It’s Mostly Good

Gordon Gray discusses President Trump’s tax plan details jpg

Will Trump’s tax plan deliver the goods on jobs?

What to expect from Trump’s tax plan

Trump Tax Reform Explained

David Stockman: We are heading into an absolute fiscal bloodbath

Keiser Report: America’s Falling Apart (E1123)

$20 Trillion: U.S. Debt Crisis | Peter Schiff and Stefan Molyneux

U.S. Debt Clock

http://www.usdebtclock.org/

Trump’s tax cuts won’t pay for themselves: David Stockman

Congress not likely to tackle tax reform without spending cuts?

Milton Friedman – Why Tax Reform Is Impossible

When Did America Stop Caring About Anything Critical?

When Did America Stop Caring About Anything Critical?

Revenue Neutral

Sen. McConnell to soften on revenue-neutral tax plan: Gasparino

McConnell Seeks Revenue-Neutral Tax Reform This Congress

Rand Paul’s Frustration with “Revenue Neutral” Tax Cuts!


Image result for Fair Tax Replaces

The American People Want The FairTax 

Especially The New Improved Version — Fair Tax Less

Demand It From Your Elected Representatives and President Trump

FairTax: Fire Up Our Economic Engine (Official HD)

FairTax: Fire Up Our Economic Engine (Official HD)

FairTax or Fair Tax Less — It Is Time

Bill Gates: Don’t tax my income, tax my consumption

Flat Tax vs. National Sales Tax

Why is the FairTax better than a flat income tax?

Freedom from the IRS! – FairTax Explained in Detail

Congressman Pence – FairTax and FlatTax

Pence on the Fair Tax

Congressman Woodall Discusses the FairTax

Rob Woodall Floor Speech: The FairTax will bring jobs back to America

Rep. Woodall Discusses FairTax with Colleagues on House Floor

The Fair Tax

Congressman King Speaks in Favor of FairTax

Rep. Woodall Discusses FairTax on House Floor

Sen. Moran Discusses FairTax Legislation on U.S. Senate Floor

Why is the FairTax better than other tax reform efforts?

AIRtax-What is It? Replaces income tax and payroll tax with sales tax

Why is the FairTax better than a flat income tax?

What is the FairTax legislation?

Does the FairTax protect privacy and other civil liberties?

How is the FairTax collected?

How does the FairTax affect the economy?

How does the FairTax impact interest rates?

Are any significant economies funded by a sales tax?

Is consumption a reliable source of revenue?

How will used goods be taxed?

What assumptions does the FairTax make about government spending?

Will the FairTax lead to a massive underground economy?

Can’t Americans just cross the border to avoid the FairTax

Will the FairTax drive the economy down if people stop buying?

How does the FairTax impact savings?

How does the FairTax impact the middle class?

How will the FairTax impact seniors?

How will Social Security payments be calculated under the FairTax?

How will the FairTax impact people who don’t file income taxes?

How will the FairTax help people who don’t hire an accountant?

How does the FairTax affect compliance costs?

How does the FairTax impact tax free bonds?

What will happen to cities who depend on tax free bonds?

What is the impact of the FairTax on business?

How does the FairTax impact retailers?

How does the FairTax affect tax preparers and CPAs?

Will the FairTax tax services?

Can I pretend to be a business to avoid the sales tax?

If people bring home their whole paychecks how can prices fall?

What is the Prebate?

How does the “prebate” work?

Is the FairTax truly progressive?

Wouldn’t it be more fair to exempt food and medicine from the FairTax?

How is the FairTax different from a Value Added Tax (VAT)?

Is it fair for rich people to get the same prebate as poor people?

Will the prebate create a massive new entitlement system?

How does the FairTax impact the middle class?

How do we keep exemptions and exclusions from undermining the FairTax?

How does the FairTax impact charitable giving?

Will the FairTax hurt home ownership with no mortgage interest deduction?

Will bartering present a compliance problem under the FairTax?

How does the FairTax affect illegal immigration?

How does the FairTax rate compare to today’s?

Wouldn’t it be more fair to exempt food and medicine from the FairTax?

Is education taxed under the FairTax?

Will government pay taxes under the FairTax?

How can you tax life saving medical treatment?

Will the FairTax hurt home ownership with no mortgage interest deduction?

What will the transition be like from the income tax to the FairTax?

Isn’t it a stretch to say the IRS will go away?

The Fair Tax – It’s Time

FairTax Prebate Explained

The FairTax… For a better America

Is the Fair Tax Act Fair?

Is America’s Tax System Fair?

Sen. Moran Discusses FairTax Legislation on U.S. Senate Floor

Pence on the Fair Tax

#30 The FAIRtax and President Elect Trump

Elvis Presley – It`s Now Or Never 1960

Elvis – It’s Now Or Never (O Sole Mio)

Elvis Presley – My Way (High Quality)

Frank Sinatra .My Way

Key Findings

  • This year, Tax Freedom Day falls on April 23rd, 113 days into the year.
  • Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.
  • Americans will pay $3.5 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total bill of more than $5.1 trillion, or 31 percent of the nation’s income.
  • Americans will collectively spend more on taxes in 2017 than they will on food, clothing, and housing combined.
  • If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 14 days later, on May 7.

What Is Tax Freedom Day?

Tax Freedom Day® is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. Tax Freedom Day takes all federal, state, and local taxes—individual as well as payroll, sales and excise, corporate and property taxes—and divides them by the nation’s income. In 2017, Americans will pay $3.5 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total tax bill of $5.1 trillion, or 31 percent of national income. This year, Tax Freedom Day falls on April 23, 113 days into the year.

What Taxes Do We Pay?

This year, Americans will work the longest—46 days—to pay federal, state, and local individual income taxes. Payroll taxes will take 26 days to pay, followed by sales and excise taxes (15 days), corporate income taxes (10 days), and property taxes (10 days). The remaining six days are spent paying estate and inheritance taxes, customs duties, and other taxes.

When Is Tax Freedom Day if You Include Federal Borrowing?

Since 2002, federal expenses have surpassed federal revenues, with the budget deficit exceeding $1 trillion annually from 2009 to 2012. In calendar year 2017, the deficit is expected to shrink slightly, from $657 billion to $612 billion. If we include this annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur on May 7, 14 days later. The latest ever deficit-inclusive Tax Freedom Day occurred during World War II, on May 25, 1945.

When Is My State’s Tax Freedom Day?

The total tax burden borne by residents across states varies considerably due to differing tax policies and the progressivity of the federal tax system. This means that states with higher incomes and higher taxes celebrate Tax Freedom Day later: Connecticut (May 21), New Jersey (May 13), and New York (May 11). Residents of Mississippi bear the lowest average tax burden in 2017, with their Tax Freedom Day having arrived on April 5. Also early were Tennessee (April 7) and South Dakota (April 8).

2017 Tax Freedom Day - State Dates

How Has Tax Freedom Day Changed over Time?

The latest ever Tax Freedom Day was May 1, 2000; in that year, Americans paid 33 percent of their total income in taxes. A century earlier, in 1900, Americans paid only 5.9 percent of their income in taxes, so that Tax Freedom Day came on January 22.

Tax Freedom Day Over Time

Methodology

In the denominator, we count every dollar that is officially part of net national income according to the Department of Commerce’s Bureau of Economic Analysis. In the numerator, we count every payment to the government that is officially considered a tax. Taxes at all levels of government—federal, state, and local—are included in the calculation. In calculating Tax Freedom Day for each state, we look at taxes borne by residents of that state, whether paid to the federal government, their own state or local governments, or governments of other states. Where possible, we allocate tax burdens to each taxpayer’s state of residence. Leap days are excluded, to allow comparison across years, and any fraction of a day is rounded up to the next calendar day

https://taxfoundation.org/publications/tax-freedom-day/

Feds Collect Record Taxes Through August; Still Run $673.7B Deficit

By Terence P. Jeffrey | September 13, 2017 | 4:28 PM EDT

(CNSNews.com) – The federal government collected record total tax revenues through the first eleven months of fiscal 2017 (Oct. 1, 2016 through the end of August), according to the Monthly Treasury Statement.

Through August, the federal government collected approximately $2,966,172,000,000 in total tax revenues.

That was $8,450,680,000 more (in constant 2017 dollars) than the previous record of $2,957,721,320,000 in total tax revenues (in 2017 dollars) that the federal government collected in the first eleven months of fiscal 2016.

At the same time that the federal government was collecting a record $2,966,172,000,000 in tax revenues, it was spending $3,639,882,000,000—and, thus, running a deficit of $673,711,000,000.

Individual income taxes have provided the largest share (47.9 percent) of federal revenues so far this fiscal year. From Oct. 1 through the end of August, the Treasury collected $1,421,997,000,000 in individual income taxes.

Payroll taxes provided the second largest share (35.9 percent), with the Treasury collecting $1,065,751,000,000 in these taxes.

The $233,631 in corporate income taxes collected in the first eleven months of fiscal 2017 equaled only 8.6 percent of total tax collections.

The $21,172,000,000 collected in estate and gift taxes equaled only 0.71 percent of total taxes collected this fiscal year.

(Tax revenues were adjusted to constant 2017 using the Bureau of Labor Statistics inflation calculator.)

The Latest: State legislatures ‘dismayed’ by GOP tax plan

Trump’s tax plan is ALREADY in trouble with his own party as plan to axe state and local tax deduction comes under fire from Republicans

  • The White House’s tax plan proposes to raise $1 trillion over 10 years by eliminating the deduction for the state and local income taxes people pay
  • That’s drawing howls of protest from Republicans whose states charge high income tax rates
  • Seven states have no income taxes, meaning their citizens wouldn’t be affected
  • But some states charge up to 13.3 per cent on top of federal taxes
  • A family in Los Angeles earning $100,000 would have to fork over roughly an additional $1,800 to Washington if the longstanding deduction goes away
  • Trump is pitching his tax plan to the National Association of Manufacturers on Friday 

As President Trump prepares to sell his tax plan to the nation’s manufacturing lobby on Friday, his best-laid tax plans have already drawn objections from some fellow Republicans who are fuming over the decision to end deductions for state and local income taxes.

The situation will pit the White House against members of Congress from states that pile high income taxes on top of what the federal government takes from paychecks.

High-income Californians, for instance, pay as much as 13.3 per cent of their income to the state in addition to their federal taxes. New Yorkers can pay up to 8.82 per cent.

Just seven U.S. states have no personal income taxes, including Texas, Florida and Nevada.

As President Trump pushes his tax plan, House Ways and Means chairman Kevin Brady (right) says he'll listen to congressmen from states that would be affected most if citizens lose deductions for state and local income taxes

As President Trump pushes his tax plan, House Ways and Means chairman Kevin Brady (right) says he’ll listen to congressmen from states that would be affected most if citizens lose deductions for state and local income taxes

State income tax rates vary widely; seven states (in gray) don't collect any, and the highest rates (dark blue) can go as high as 13.3 per cent

State income tax rates vary widely; seven states (in gray) don’t collect any, and the highest rates (dark blue) can go as high as 13.3 per cent

Under the Trump tax reform plan, a family earning $100,000 in Los Angeles pays about $6,000 in state and local income taxes. Losing the ability to deduct that expense would cost the hypothetical taxpayers around $1,800.

The GOP is working on a way to pacify legislators whose constituents would wind up paying more.

‘The members with concerns from high-tax states have to be accommodated,’ Illinois Republican Rep. Peter Roskam told The Wall Street Journal. Roskam is a senior member of the powerful House Ways and Means Committee.

‘So, you can imagine a soft landing on this that creative people are putting much time and energy into.’

The White House has shown no sign that it’s willing to budge on eliminating the deduction for state and local taxes since it would bring in about $1 trillion over a 10-year period.

With the prospect of persuading Democrats to go along with a new tax play already slim, the GOP will need every Republican vote it can get.

The Journal reports that the nine states whose citizens use the deduction, measured as a percentage of income, are represented by 33 House Republicans.

If Republicans lose more than 22 votes, Trump’s tax plan is effective dead.

Ways and Means member Peter Roskam, and Illinois Republican, says tax code-writers are finding a 'soft landing' for states that pay the most income tax to their local governments

Ways and Means member Peter Roskam, and Illinois Republican, says tax code-writers are finding a ‘soft landing’ for states that pay the most income tax to their local governments

White House chief economic adviser Gary Cohn briefed the press at the White House on Thursday but wouldn't promise that every middle-class U.S. family would get a tax cut

White House chief economic adviser Gary Cohn briefed the press at the White House on Thursday but wouldn’t promise that every middle-class U.S. family would get a tax cut

APRIL 13, 2016

High-income Americans pay most income taxes, but enough to be ‘fair’?

Corporations paying fewer taxes

Tax-deadline season isn’t many people’s favorite time of the year, but most Americans are OK with the amount of tax they pay. It’s what other people pay, or don’t pay, that bothers them.

Just over half (54%) of Americans surveyed in fall by Pew Research Center said they pay about the right amount in taxes considering what they get from the federal government, versus 40% who said they pay more than their fair share. But in a separate 2015 surveyby the Center, some six-in-ten Americans said they were bothered a lot by the feeling that “some wealthy people” and “some corporations” don’t pay their fair share.

It’s true that corporations are funding a smaller share of overall government operations than they used to. In fiscal 2015, the federal government collected $343.8 billion from corporate income taxes, or 10.6% of its total revenue. Back in the 1950s, corporate income tax generated between a quarter and a third of federal revenues (though payroll taxes have grown considerably over that period).

Nor have corporate tax receipts kept pace with the overall growth of the U.S. economy. Inflation-adjusted gross domestic product has risen 153% since 1980, while inflation-adjusted corporate tax receipts were 115% higher in fiscal 2015 than in fiscal 1980, according to the Bureau of Economic Analysis. There have been a lot of ups and downs over that period, as corporate tax receipts tend to rise during expansions and drop off in recessions. In fiscal 2007, for instance, corporate taxes hit $370.2 billion (in current dollars), only to plunge to $138.2 billion in 2009 as businesses felt the impact of the Great Recession.

Corporations also employ battalions of tax lawyers to find ways to reduce their tax bills, from running income through subsidiaries in low-tax foreign countries to moving overseas entirely, in what’s known as a corporate inversion (a practice the Treasury Department has moved to discourage).

But in Tax Land, the line between corporations and people can be fuzzy. While most major corporations (“C corporations” in tax lingo) pay according to the corporate tax laws, many other kinds of businesses – sole proprietorships, partnerships and closely held “S corporations” – fall under the individual income tax code, because their profits and losses are passed through to individuals. And by design, wealthier Americans pay most of the nation’s total individual income taxes.

Wealthy pay more in taxes than poorIn 2014, people with adjusted gross income, or AGI, above $250,000 paid just over half (51.6%) of all individual income taxes, though they accounted for only 2.7% of all returns filed, according to our analysis of preliminary IRS data. Their average tax rate (total taxes paid divided by cumulative AGI) was 25.7%. By contrast, people with incomes of less than $50,000 accounted for 62.3% of all individual returns filed, but they paid just 5.7% of total taxes. Their average tax rate was 4.3%.

The relative tax burdens borne by different income groups changes over time, due both to economic conditions and the constantly shifting provisions of tax law. For example, using more comprehensive IRS data covering tax years 2000 through 2011, we found that people who made between $100,000 and $200,000 paid 23.8% of the total tax liability in 2011, up from 18.8% in 2000. Filers in the $50,000-to-$75,000 group, on the other hand, paid 12% of the total liability in 2000 but only 9.1% in 2011. (The tax liability figures include a few taxes, such as self-employment tax and the “nanny tax,” that people typically pay along with their income taxes.)

All told, individual income taxes accounted for a little less than half (47.4%) of government revenue, a share that’s been roughly constant since World War II. The federal government collected $1.54 trillion from individual income taxes in fiscal 2015, making it the national government’s single-biggest revenue source. (Other sources of federal revenue include corporate income taxes, the payroll taxes that fund Social Security and Medicare, excise taxes such as those on gasoline and cigarettes, estate taxes, customs duties and payments from the Federal Reserve.) Until the 1940s, when the income tax was expanded to help fund the war effort, generally only the very wealthy paid it.

Since the 1970s, the segment of federal revenues that has grown the most is the payroll tax – those line items on your pay stub that go to pay for Social Security and Medicare. For most people, in fact, payroll taxes take a bigger bite out of their paycheck than federal income tax. Why? The 6.2% Social Security withholding tax only applies to wages up to $118,500. For example, a worker earning $40,000 will pay $2,480 (6.2%) in Social Security tax, but an executive earning $400,000 will pay $7,347 (6.2% of $118,500), for an effective rate of just 1.8%. By contrast, the 1.45% Medicare tax has no upper limit, and in fact high earners pay an extra 0.9%.

All but the top-earning 20% of American families pay more in payroll taxes than in federal income taxes, according to a Treasury Department analysis.

Still, that analysis confirms that, after all federal taxes are factored in, the U.S. tax system as a whole is progressive. The top 0.1% of families pay the equivalent of 39.2% and the bottom 20% have negative tax rates (that is, they get more money back from the government in the form of refundable tax credits than they pay in taxes).

Of course, people can and will differ on whether any of this constitutes a “fair” tax system. Depending on their politics and personal situations, some would argue for a more steeply progressive structure, others for a flatter one. Finding the right balance can be challenging to the point of impossibility: As Jean-Baptiste Colbert, Louis XIV’s finance minister, is said to have remarked: “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

Note: This is an update of an earlier post published March 24, 2015.

http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/

Distrust of Senate grows within GOP

A day after the GOP presented a united front around the rollout of President Trump’s tax plan, House Republicans are expressing deep reservations about the Senate’s ability to get the job done.

Lawmakers stung over the failure to pass ObamaCare repeal worry the same fate could befall the tax measure if a handful of senators raise objections.

Donald Trump won with an electoral landside and his three big campaign points were ObamaCare repeal, tax reform and border security. For a handful of senators to derail that agenda is very frustrating,” said Rep. Blake Farenthold (R-Texas).

Rep. Tom Cole (R-Okla.), who is close to the House GOP leadership, says colleagues are frustrated with a handful of senators “overruling the will of the entire House.”

“We do need to see them step up and actually deliver for a change. We have over 200 bills sitting stalled over there. They haven’t been able to deliver on [health care] reform and they all ran on it and now we have a do-or-die moment on tax reform,” he said.

There’s also a sense among House Republicans that their Senate brethren aren’t under the same pressure to get results — perhaps because the GOP’s majority in the Senate is seen as safer in the 2018 midterm elections than the House majority.

“They put our majority in jeopardy with their failure on health care, more than they did their own,” Cole said.

While Republicans have a bigger majority in the House than in the Senate, the political map favors the Senate GOP in 2018.

Republicans only have to defend nine seats next year, and only one — held by Sen. Dean Heller (R-Nev.) — is in a state won by 2016 Democratic presidential nominee Hillary Clinton. Democrats are defending more than 20 seats, including 10 in states won by Trump.

In the House, Republicans represent 23 districts carried by Clinton, just shy of what Democrats would need to win to take back the majority.

Republicans are excited about moving to tax reform, and Trump’s plan received enthusiastic support at a half-day private retreat the House GOP held Wednesday to review it.

The president’s proposals to eliminate the estate tax and the alternative minimum tax received ovations.

But the mood turned more somber when Rep. Bruce Poliquin (R-Maine) stood up to ask if the Senate could be counted on to pass tax legislation, according to people familiar with the meeting.

A spokesman for Poliquin did not respond to a request for comment.

“A lot of House members trust a lot of senators to introduce their own tax reform bills,” said Rep. Steve King (R-Iowa), alluding to how senators seek to show independence by offering their own bills.

House Republicans say they can easily see GOP Sens. Susan Collins(Maine), John McCain (Ariz.) and Lisa Murkowski (Alaska), who all voted against a slimmed-down ObamaCare repeal bill in July, bucking the leadership again.SPONSORED BY NEXT ADVISOR

“I do not understand what motivates John McCain,” King said. “I don’t know what goes on in the minds of folks from Maine.”

Earlier this year, in an illustration of the frustration House Republicans hold for the Senate hold-outs, Farenthold joked about challenging Collins to a duel. He later apologized.

McCain later told The Hill that the health-care bill was doomed because it’s virtually impossible to tackle something as huge as reform as health care on a partisan basis.

“If you’re going to pass a major reform, you got to have bipartisan support,” he said.

Speaker Paul Ryan (R-Wis.) is making the case that Senate Republicans are more likely to come through on tax reform because McConnell and Senate Finance Committee Chairman Orrin Hatch (R-Utah) have already negotiated a tax reform framework with the administration and House leaders.

“What we did differently in this go around is we spent the last four months basically working together, the Senate Finance Committee, the House Ways and Means Committee and the White House, making sure that we’re on the same page,” Ryan told CNBC’s “Squawk Box” on Thursday morning.

Ryan explained that leaders made sure they did “the hard lifting, the tough work ahead of schedule, ahead of rollout.”

But he also acknowledged that House Republicans have just about run out of patience with the Senate after the collapse of health care reform this week.

“We’re really frustrated. Look, we passed 373 bills here in the House — 270-some are still in the Senate,” he said.

Already there are doubts that Senate Republicans will stick to the plan on taxes.

Hatch, who heads the Senate’s tax writing panel, told reporters Thursday afternoon that he would like to keep in place the deduction for state and local taxes, which the administration wants to eliminate to provide revenue for lower rates.

A spokeswoman for the Finance Committee said, “Chairman Hatch recognizes that every major provision within the tax code has an important constituency and consequence.”

http://thehill.com/homenews/senate/352999-distrust-of-senate-grows-within-gop

Key Findings

  • This year, Tax Freedom Day falls on April 23rd, 113 days into the year.
  • Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.
  • Americans will pay $3.5 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total bill of more than $5.1 trillion, or 31 percent of the nation’s income.
  • Americans will collectively spend more on taxes in 2017 than they will on food, clothing, and housing combined.
  • If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 14 days later, on May 7.

What Is Tax Freedom Day?

Tax Freedom Day® is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. Tax Freedom Day takes all federal, state, and local taxes—individual as well as payroll, sales and excise, corporate and property taxes—and divides them by the nation’s income. In 2017, Americans will pay $3.5 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total tax bill of $5.1 trillion, or 31 percent of national income. This year, Tax Freedom Day falls on April 23, 113 days into the year.

What Taxes Do We Pay?

This year, Americans will work the longest—46 days—to pay federal, state, and local individual income taxes. Payroll taxes will take 26 days to pay, followed by sales and excise taxes (15 days), corporate income taxes (10 days), and property taxes (10 days). The remaining six days are spent paying estate and inheritance taxes, customs duties, and other taxes.

When Is Tax Freedom Day if You Include Federal Borrowing?

Since 2002, federal expenses have surpassed federal revenues, with the budget deficit exceeding $1 trillion annually from 2009 to 2012. In calendar year 2017, the deficit is expected to shrink slightly, from $657 billion to $612 billion. If we include this annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur on May 7, 14 days later. The latest ever deficit-inclusive Tax Freedom Day occurred during World War II, on May 25, 1945.

When Is My State’s Tax Freedom Day?

The total tax burden borne by residents across states varies considerably due to differing tax policies and the progressivity of the federal tax system. This means that states with higher incomes and higher taxes celebrate Tax Freedom Day later: Connecticut (May 21), New Jersey (May 13), and New York (May 11). Residents of Mississippi bear the lowest average tax burden in 2017, with their Tax Freedom Day having arrived on April 5. Also early were Tennessee (April 7) and South Dakota (April 8).

2017 Tax Freedom Day - State Dates

How Has Tax Freedom Day Changed over Time?

The latest ever Tax Freedom Day was May 1, 2000; in that year, Americans paid 33 percent of their total income in taxes. A century earlier, in 1900, Americans paid only 5.9 percent of their income in taxes, so that Tax Freedom Day came on January 22.

Tax Freedom Day Over Time

Methodology

In the denominator, we count every dollar that is officially part of net national income according to the Department of Commerce’s Bureau of Economic Analysis. In the numerator, we count every payment to the government that is officially considered a tax. Taxes at all levels of government—federal, state, and local—are included in the calculation. In calculating Tax Freedom Day for each state, we look at taxes borne by residents of that state, whether paid to the federal government, their own state or local governments, or governments of other states. Where possible, we allocate tax burdens to each taxpayer’s state of residence. Leap days are excluded, to allow comparison across years, and any fraction of a day is rounded up to the next calendar day

https://taxfoundation.org/publications/tax-freedom-day/

Feds Collect Record Taxes Through August; Still Run $673.7B Deficit

By Terence P. Jeffrey | September 13, 2017 | 4:28 PM EDT

(CNSNews.com) – The federal government collected record total tax revenues through the first eleven months of fiscal 2017 (Oct. 1, 2016 through the end of August), according to the Monthly Treasury Statement.

Through August, the federal government collected approximately $2,966,172,000,000 in total tax revenues.

That was $8,450,680,000 more (in constant 2017 dollars) than the previous record of $2,957,721,320,000 in total tax revenues (in 2017 dollars) that the federal government collected in the first eleven months of fiscal 2016.

At the same time that the federal government was collecting a record $2,966,172,000,000 in tax revenues, it was spending $3,639,882,000,000—and, thus, running a deficit of $673,711,000,000.

Individual income taxes have provided the largest share (47.9 percent) of federal revenues so far this fiscal year. From Oct. 1 through the end of August, the Treasury collected $1,421,997,000,000 in individual income taxes.

Payroll taxes provided the second largest share (35.9 percent), with the Treasury collecting $1,065,751,000,000 in these taxes.

The $233,631 in corporate income taxes collected in the first eleven months of fiscal 2017 equaled only 8.6 percent of total tax collections.

The $21,172,000,000 collected in estate and gift taxes equaled only 0.71 percent of total taxes collected this fiscal year.

(Tax revenues were adjusted to constant 2017 using the Bureau of Labor Statistics inflation calculator.)

The Latest: State legislatures ‘dismayed’ by GOP tax plan

WASHINGTON (AP) — The Latest on the Republican plan to overhaul the tax code (all times local):

4:40 p.m.

An organization that advocates for state legislatures says it’s “dismayed” the Republican tax cut proposal unveiled Wednesday would do away with a deduction for state and local taxes paid.

The National Conference of State Legislatures says the deduction has existed in the federal tax code since its inception. The group says “tens of millions of middle-class taxpayers of every political affiliation” would experience a greater tax burden if the deduction were eliminated.

The group says the deduction’s elimination will also impede states in their efforts to invest in education and other public services.

About a third of tax filers itemize deductions on their federal income tax returns. The Tax Policy Center says virtually all who do claim a deduction for state and local taxes paid.

___

4:10 p.m.

President Donald Trump is issuing a warning shot to Indiana’s Democratic senator: Support my tax overhaul or I’ll campaign against you next year.

Trump says at a tax event in Indiana that if Sen. Joe Donnelly doesn’t approve the plan, “we will come here and we will campaign against him like you wouldn’t believe.”

But Trump is predicting that numerous Democrats will come across the aisle and support his plan “because it’s the right thing to do.”

The president has made overtures to Democratic senators like Claire McCaskill of Missouri and Heidi Heitkamp of North Dakota in recent weeks. All three are facing re-election in 2018.

___

4 p.m.

Small business advocates are split over the draft of the new Republican tax plan.

The National Federation of Independent Business is praising the proposal to tax business income at 20 percent — including sole proprietors whose business income is taxed at individual rates up to 39.6 percent.

The Small Business & Entrepreneurship Council says the plan would simplify business taxes, encourage business investment and increase owners’ confidence.

But the Small Business Majority says the plan wouldn’t help most small companies, and the current top rate is paid by less than 2 percent of those businesses.

And John O’Neill, a tax analyst at the American Sustainable Business Council, says tax reform isn’t as useful to the economy as investing in infrastructure and education.

President Donald Trump is calling the current tax system a “relic” and a “colossal barrier” that’s standing in the way of the nation’s economic comeback.

Trump says at an event in Indianapolis that his tax proposal will help middle-class families save money and will eliminate loopholes that benefit the wealthy.

Trump says the wealthy “can call me all they want. It’s not going to help.” The billionaire president says he’s “doing the right thing. And it’s not good for me, believe me.”

The president says under his plan, “the vast majority of families will be able to file their taxes on a single sheet of paper.”

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3:40 p.m.

President Donald Trump is making the case for a sweeping plan to overhaul the tax system for individuals and corporations. He calls it a “once in a generation” opportunity to cut taxes.

The president says in Indiana that he wants to cut taxes for middle-class families to make the system simpler and fairer.

Trump says his tax plan will “bring back the jobs and the wealth that have left our country.” He says it’s time for the nation to fight for American workers.

He’s praising his vice president, Mike Pence, Indiana’s former governor. Trump says, “it’s time for Washington to learn from the wisdom of Indiana.”

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2:52 p.m.

A budget watchdog group in Washington says the new GOP tax plan could cost $2.2 trillion over the next 10 years.

The Committee for a Responsible Federal Budget admits its estimate is very preliminary since so many details are unclear, but its take is that the plan contains about $5.8 trillion in tax cuts but only $3.6 trillion worth of offsetting tax increases. That $2.2 trillion would be added to the nation’s $20 trillion debt.

That’s more than the $1.5 trillion debt cost that has emerged in a deal among Senate Republicans.

Republicans controlling Congress initially promised that the overhaul of the tax code wouldn’t add to the debt. The group also notes that the $2.2 trillion cost could grow by another $500 billion when interest costs are added in.

_____

1:54 p.m.

President Donald Trump says he’s always wanted to reduce the corporate tax rate to 20 percent — even though he said repeatedly he wanted to see it lowered to 15 percent.

Trump told reporters as he departed Washington for Indiana on Wednesday afternoon that a 20 percent rate was his “red line” and that it had always been his goal.

“In fact, I wanted to start at 15 so that we got 20,” he said, adding: “20′s my number.”

Trump also denies the plan unveiled by the White House and congressional Republicans Wednesday would benefit the wealthy.

He says: “I think there’s very little benefit for people of wealth.”

Under the plan, corporations would see their top tax rate cut from 35 percent to 20 percent.

____

1:37 p.m.

A vocal group of the most conservative House Republicans has come out in support of a draft tax plan endorsed by both President Donald Trump and top congressional GOP leaders.

The House Freedom Caucus endorsement is noteworthy because it could ease House passage of a budget plan that’s the first step to advancing the tax cut measure through Congress.

The group says the outline will allow workers to “keep more of their money,” while simplifying the loophole-choked tax code and making U.S. companies more competitive with their foreign rivals.

The group had held up action on the budget measure as they demanded more details on taxes.

_____

11:21 a.m.

President Donald Trump has two red lines that he refuses to cross on overhauling taxes: the corporate rate must be cut to 20 percent and the savings must go to the middle class.

Gary Cohn, the president’s top economics aide, says any overhaul signed by the president needs to include these two elements.

Trump had initially pushed for cutting the 39.6 percent corporate tax rate to 15 percent.

The administration says that the benefits of any tax cut will not favor the wealthy, with Cohn saying that an additional tax bracket could be added to levy taxes on the top one percent of earners if needed.

_____

11:20 a.m.

The Senate’s top Democrat is blasting a new tax cut plan backed by President Donald Trump as a giveaway to the rich.

Sen. Chuck Schumer says Trump’s plan only gives “crumbs” to the middle class, while top-bracket earners making more than a half-million dollars a year would reap a windfall.

The New York Democrat also blasted the plan for actually increasing the bottom tax rate from 10 percent to 12 percent, calling it a “punch to the gut of working Americans.”

Schumer said the plan is little more than an “across-the-board tax cut for America’s millionaires and billionaires.”

The plan, to be officially released Wednesday afternoon, is the top item on Washington’s agenda after the GOP failure to repeal the Obama health care law.

_____

9:53 a.m.

A new Republican blueprint for overhauling the U.S. tax code employs the themes of economic populism that President Donald Trump trumpeted during the presidential campaign to win support from working-class voters.

A copy of the plan to be released later Wednesday says, “Too many in our country are shut out of the dynamism of the U.S. economy.” That’s led to what the plans says is “the justifiable feeling that the system is rigged against hardworking Americans.”

The plan, obtained by The Associated Press, says the Trump administration and Congress “will work together to produce tax reform that will put America first.”

The GOP plan for the first major rewrite of the U.S. tax code in 30 years also says corporations will be stopped from shipping jobs and capital overseas.

_____

9:20 a.m.

President Donald Trump and congressional Republicans are proposing a tax plan that they say will be simple and fair.

In a document obtained by The Associated Press on Wednesday, they outline a blueprint for almost doubling the standard deduction for married taxpayers filing jointly to $24,000, and $12,000 for individuals.

The plan calls for cutting the corporate tax rate from 35 percent to 20 percent. The GOP proposal also calls for reducing the number of tax brackets from seven to three with a surcharge on the wealthiest Americans.

The plan also leaves intact the deduction for mortgage interest and charitable deductions.

The White House and Republicans plan a formal roll out later Wednesday.

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4:26 a.m.

President Donald Trump and congressional Republicans are rolling out a sweeping plan to cut taxes for individuals and corporations, simplify the tax system, and likely double the standard deduction used by most Americans.

Months in the making, the plan meets a political imperative for Republicans to deliver an overhaul of the U.S. tax code after the failure of the health care repeal.

The public reveal of the plan was set for Wednesday. The day before, details emerged on Capitol Hill while Trump personally appealed to House Republicans and Democrats at the White House to get behind his proposal.

https://apnews.com/f609602269d54524aa14e1d9c74ec97c

 

President Trump spoke about his administration’s tax reform plan in Indianapolis on Wednesday.CreditTom Brenner/The New York Times

WASHINGTON — The tax plan that the Trump administration outlined on Wednesday is a potentially huge windfall for the wealthiest Americans. It would not directly benefit the bottom third of the population. As for the middle class, the benefits appear to be modest.

The administration and its congressional allies are proposing to sharply reduce taxation of business income, primarily benefiting the small share of the population that owns the vast majority of corporate equity. President Trump said on Wednesday that the cuts would increase investment and spur growth, creating broader prosperity. But experts say the upside is limited, not least because the economy is already expanding.

The plan would also benefit Mr. Trump and other affluent Americans by eliminating the estate tax, which affects just a few thousand uber-wealthy families each year, and the alternative minimum tax, a safety net designed to prevent tax avoidance.

The precise impact on Mr. Trump cannot be ascertained because the president refuses to release his tax returns, but the few snippets of returns that have become public show one thing clearly: The alternative minimum tax has been unkind to Mr. Trump. In 2005, it forced him to pay $31 million in additional taxes.

Mr. Trump has also pledged repeatedly that the plan would reduce the taxes paid by middle-class families, but he has not provided enough details to evaluate that claim. While some households would probably get tax cuts, others could end up paying more.

https://tpc.googlesyndication.com/safeframe/1-0-10/html/container.html

The plan would not benefit lower-income households that do not pay federal income taxes. The president is not proposing measures like a reduction in payroll taxes, which are paid by a much larger share of workers, nor an increase in the earned-income tax credit, which would expand wage support for the working poor.

Indeed, to call the plan “tax reform” seems like a stretch — Mr. Trump himself told conservative and evangelical leaders on Monday that it was more apt to refer to his plan as “tax cuts.” Mr. Trump’s proposal echoes the large tax cuts that President Ronald Reagan, in 1981, and President George W. Bush, in 2001, passed in the first year of their terms, not the 1986 overhaul of the tax code that he often cites. Like his Republican predecessors, Mr. Trump says cutting taxes will increase economic growth.

Photo

The public portion of the debt equaled 24 percent of the gross domestic product in 1981 when President Ronald Reagan signed a tax cut at his vacation home near Santa Barbara, Calif. In June of this year, the debt equaled 75 percent of economic output. CreditAssociated Press

“It’s time to take care of our people, to rebuild our nation and to fight for our great American workers,” Mr. Trump told a crowd in Indianapolis.

But the moment is very different. Mr. Reagan and Mr. Bush cut taxes during recessions. Mr. Trump is proposing to cut taxes during one of the longest economic expansions in American history. It is not clear that the economy can grow much faster; the Federal Reserve has warned that it will seek to offset any stimulus by raising interest rates.

At the time of the earlier cuts, the federal debt was considerably smaller. The public portion of the debt equaled 24 percent of the gross domestic product in 1981, and 31 percent in 2001. In June, the debt equaled 75 percent of economic output.

The Trump administration insists that its tax cut will catalyze such an economic boom that money will flow into the federal coffers and the debt will not rise. The Reagan and Bush administrations made similar claims. The debt soared in both instances.

Another issue: Both Mr. Bush and Mr. Reagan proposed to cut taxes when federal revenues had climbed unusually high as a share of the national economy.

Mr. Trump wants to cut taxes while revenues are close to an average level.

Since 1981, federal revenue has averaged 17.1 percent of the nation’s gross domestic product, while federal spending has averaged 20.3 percent.

Last year’s numbers were close to the long-term trend: Federal revenue was 17.5 percent of gross domestic product; spending was 20.7 percent.

Martin Feldstein, a Harvard University economics professor and a longtime adviser to Republican presidents, said that the moment was not perfect, but that Mr. Trump should nevertheless press ahead because the changes would be valuable.

“The debt is moving in the wrong direction,” Mr. Feldstein said. “But the tax reform is moving in the right direction.”

Proponents of the plan assert that the largest benefits are indirect. In particular, they argue that cutting corporate taxes will unleash economic growth.

Mr. Trump’s plan is more focused on business tax cuts than the Reagan and Bush plans, and economists agree that this makes economic gains more likely.

The key elements are large reductions in the tax rates for business income: To 20 percent for corporations, and to 25 percent for “pass-through” businesses, a broad category that includes everything from mom-and-pop neighborhood shops to giant investment partnerships, law firms — and real estate developers.

The plan also lets businesses immediately deduct the full cost of new investments.

“You’re going to get a boost in investment,” said William Gale, co-director of the nonpartisan Tax Policy Center. “It’s hard to argue that there won’t be a positive effect.”

But Mr. Gale added that there are reasons to think it would be modest.

The most important is that the economy is already growing at a faster pace than the Fed considers sustainable. “Economy roaring,” Mr. Trump tweeted on Wednesday.

Photo

After President George W. Bush’s 2001 tax cuts, the wealthiest Americans paid 34.7 percent of their income in taxes, while Americans in the middle income brackets paid 16.1 percent. CreditRon Edmonds/Associated Press

Also, interest rates are low, and nonfinancial companies are sitting on $1.84 trillion that they don’t want to spend. “It’s not lack of funds that’s stopping companies from investing,” Mr. Gale said.

And the stimulus would come at the cost of increased federal borrowing. Interest rates might not rise if foreigners provide the necessary money, as happened in the 1980s and the 2000s, but that means some of the benefits also end up abroad.

It’s a venerable principle that lower tax rates encourage corporate investment. But a study of a 2003 cut in the tax rate on corporate dividendsfound no discernible impact on investment. The finding would not have surprised Mr. Bush’s Treasury secretary at the time, Paul O’Neill, who was fired for opposing the plan. “You find somebody who says, ‘I do more R & D because I get a tax credit for it,’ you’ll find a fool,” Mr. O’Neill, a former Alcoa chairman, said at the time.

Mr. Trump’s plan also continues a long-term march away from progressive taxation. The federal income tax is the centerpiece of a longstanding bipartisan consensus that wealthy Americans should pay an outsize share of the cost of government.

But successive rounds of tax cuts have eroded that premise, according to research by the economists Thomas Piketty of the Paris School of Economics and Emmanuel Saez of the University of California at Berkeley. In 1980, the wealthiest Americans paid 59 percent of their income in taxes while the middle 20 percent of Americans paid 24.5 percent. After the Bush tax cuts, the wealthiest Americans paid 34.7 percent of their income in taxes, while Americans in the middle income brackets paid 16.1 percent.

Under President Barack Obama, Congress increased taxation of upper-income households. Mr. Trump is seeking to resume the long-term trend toward flattening the curve. Upper-income households would get large tax cuts; lower-income households would get none.

The exact impact on the middle class is not yet clear. The outline released Wednesday proposes new tax brackets but does not specify income thresholds. It also proposes to replace the current tax deduction for each dependent with a child tax credit — but the administration did not propose a dollar amount for that new credit.

 

The administration said Wednesday that it was committed “to ensure that the reformed tax code is at least as progressive as the existing tax code.” That language, however, applies only to personal income taxes. The proposed reduction of business taxes and the elimination of the estate tax would both disproportionately benefit wealthy Americans.

“I don’t think there’s any way to justify this as a progressive proposal,” said Lily Batchelder, a law professor at New York University who served as deputy director of Mr. Obama’s National Economic Council. “In broad brush strokes, they’re doing nothing for the bottom 35 percent, they’re doing very little and possibly raising taxes on the middle class, and they’ve specified tax cuts for the wealthy.”

Trump’s tax plan is ALREADY in trouble with his own party as plan to axe state and local tax deduction comes under fire from Republicans

  • The White House’s tax plan proposes to raise $1 trillion over 10 years by eliminating the deduction for the state and local income taxes people pay
  • That’s drawing howls of protest from Republicans whose states charge high income tax rates
  • Seven states have no income taxes, meaning their citizens wouldn’t be affected
  • But some states charge up to 13.3 per cent on top of federal taxes
  • A family in Los Angeles earning $100,000 would have to fork over roughly an additional $1,800 to Washington if the longstanding deduction goes away
  • Trump is pitching his tax plan to the National Association of Manufacturers on Friday 

As President Trump prepares to sell his tax plan to the nation’s manufacturing lobby on Friday, his best-laid tax plans have already drawn objections from some fellow Republicans who are fuming over the decision to end deductions for state and local income taxes.

The situation will pit the White House against members of Congress from states that pile high income taxes on top of what the federal government takes from paychecks.

High-income Californians, for instance, pay as much as 13.3 per cent of their income to the state in addition to their federal taxes. New Yorkers can pay up to 8.82 per cent.

Just seven U.S. states have no personal income taxes, including Texas, Florida and Nevada.

As President Trump pushes his tax plan, House Ways and Means chairman Kevin Brady (right) says he'll listen to congressmen from states that would be affected most if citizens lose deductions for state and local income taxes

As President Trump pushes his tax plan, House Ways and Means chairman Kevin Brady (right) says he’ll listen to congressmen from states that would be affected most if citizens lose deductions for state and local income taxes

State income tax rates vary widely; seven states (in gray) don't collect any, and the highest rates (dark blue) can go as high as 13.3 per cent

State income tax rates vary widely; seven states (in gray) don’t collect any, and the highest rates (dark blue) can go as high as 13.3 per cent

Under the Trump tax reform plan, a family earning $100,000 in Los Angeles pays about $6,000 in state and local income taxes. Losing the ability to deduct that expense would cost the hypothetical taxpayers around $1,800.

The GOP is working on a way to pacify legislators whose constituents would wind up paying more.

‘The members with concerns from high-tax states have to be accommodated,’ Illinois Republican Rep. Peter Roskam told The Wall Street Journal. Roskam is a senior member of the powerful House Ways and Means Committee.

‘So, you can imagine a soft landing on this that creative people are putting much time and energy into.’

The White House has shown no sign that it’s willing to budge on eliminating the deduction for state and local taxes since it would bring in about $1 trillion over a 10-year period.

With the prospect of persuading Democrats to go along with a new tax play already slim, the GOP will need every Republican vote it can get.

The Journal reports that the nine states whose citizens use the deduction, measured as a percentage of income, are represented by 33 House Republicans.

If Republicans lose more than 22 votes, Trump’s tax plan is effective dead.

Ways and Means member Peter Roskam, and Illinois Republican, says tax code-writers are finding a 'soft landing' for states that pay the most income tax to their local governments

Ways and Means member Peter Roskam, and Illinois Republican, says tax code-writers are finding a ‘soft landing’ for states that pay the most income tax to their local governments

White House chief economic adviser Gary Cohn briefed the press at the White House on Thursday but wouldn't promise that every middle-class U.S. family would get a tax cut

White House chief economic adviser Gary Cohn briefed the press at the White House on Thursday but wouldn’t promise that every middle-class U.S. family would get a tax cut

APRIL 13, 2016

High-income Americans pay most income taxes, but enough to be ‘fair’?

Corporations paying fewer taxes

Tax-deadline season isn’t many people’s favorite time of the year, but most Americans are OK with the amount of tax they pay. It’s what other people pay, or don’t pay, that bothers them.

Just over half (54%) of Americans surveyed in fall by Pew Research Center said they pay about the right amount in taxes considering what they get from the federal government, versus 40% who said they pay more than their fair share. But in a separate 2015 surveyby the Center, some six-in-ten Americans said they were bothered a lot by the feeling that “some wealthy people” and “some corporations” don’t pay their fair share.

It’s true that corporations are funding a smaller share of overall government operations than they used to. In fiscal 2015, the federal government collected $343.8 billion from corporate income taxes, or 10.6% of its total revenue. Back in the 1950s, corporate income tax generated between a quarter and a third of federal revenues (though payroll taxes have grown considerably over that period).

Nor have corporate tax receipts kept pace with the overall growth of the U.S. economy. Inflation-adjusted gross domestic product has risen 153% since 1980, while inflation-adjusted corporate tax receipts were 115% higher in fiscal 2015 than in fiscal 1980, according to the Bureau of Economic Analysis. There have been a lot of ups and downs over that period, as corporate tax receipts tend to rise during expansions and drop off in recessions. In fiscal 2007, for instance, corporate taxes hit $370.2 billion (in current dollars), only to plunge to $138.2 billion in 2009 as businesses felt the impact of the Great Recession.

Corporations also employ battalions of tax lawyers to find ways to reduce their tax bills, from running income through subsidiaries in low-tax foreign countries to moving overseas entirely, in what’s known as a corporate inversion (a practice the Treasury Department has moved to discourage).

But in Tax Land, the line between corporations and people can be fuzzy. While most major corporations (“C corporations” in tax lingo) pay according to the corporate tax laws, many other kinds of businesses – sole proprietorships, partnerships and closely held “S corporations” – fall under the individual income tax code, because their profits and losses are passed through to individuals. And by design, wealthier Americans pay most of the nation’s total individual income taxes.

Wealthy pay more in taxes than poorIn 2014, people with adjusted gross income, or AGI, above $250,000 paid just over half (51.6%) of all individual income taxes, though they accounted for only 2.7% of all returns filed, according to our analysis of preliminary IRS data. Their average tax rate (total taxes paid divided by cumulative AGI) was 25.7%. By contrast, people with incomes of less than $50,000 accounted for 62.3% of all individual returns filed, but they paid just 5.7% of total taxes. Their average tax rate was 4.3%.

The relative tax burdens borne by different income groups changes over time, due both to economic conditions and the constantly shifting provisions of tax law. For example, using more comprehensive IRS data covering tax years 2000 through 2011, we found that people who made between $100,000 and $200,000 paid 23.8% of the total tax liability in 2011, up from 18.8% in 2000. Filers in the $50,000-to-$75,000 group, on the other hand, paid 12% of the total liability in 2000 but only 9.1% in 2011. (The tax liability figures include a few taxes, such as self-employment tax and the “nanny tax,” that people typically pay along with their income taxes.)

All told, individual income taxes accounted for a little less than half (47.4%) of government revenue, a share that’s been roughly constant since World War II. The federal government collected $1.54 trillion from individual income taxes in fiscal 2015, making it the national government’s single-biggest revenue source. (Other sources of federal revenue include corporate income taxes, the payroll taxes that fund Social Security and Medicare, excise taxes such as those on gasoline and cigarettes, estate taxes, customs duties and payments from the Federal Reserve.) Until the 1940s, when the income tax was expanded to help fund the war effort, generally only the very wealthy paid it.

Since the 1970s, the segment of federal revenues that has grown the most is the payroll tax – those line items on your pay stub that go to pay for Social Security and Medicare. For most people, in fact, payroll taxes take a bigger bite out of their paycheck than federal income tax. Why? The 6.2% Social Security withholding tax only applies to wages up to $118,500. For example, a worker earning $40,000 will pay $2,480 (6.2%) in Social Security tax, but an executive earning $400,000 will pay $7,347 (6.2% of $118,500), for an effective rate of just 1.8%. By contrast, the 1.45% Medicare tax has no upper limit, and in fact high earners pay an extra 0.9%.

All but the top-earning 20% of American families pay more in payroll taxes than in federal income taxes, according to a Treasury Department analysis.

Still, that analysis confirms that, after all federal taxes are factored in, the U.S. tax system as a whole is progressive. The top 0.1% of families pay the equivalent of 39.2% and the bottom 20% have negative tax rates (that is, they get more money back from the government in the form of refundable tax credits than they pay in taxes).

Of course, people can and will differ on whether any of this constitutes a “fair” tax system. Depending on their politics and personal situations, some would argue for a more steeply progressive structure, others for a flatter one. Finding the right balance can be challenging to the point of impossibility: As Jean-Baptiste Colbert, Louis XIV’s finance minister, is said to have remarked: “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

Note: This is an update of an earlier post published March 24, 2015.

http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/

Distrust of Senate grows within GOP

A day after the GOP presented a united front around the rollout of President Trump’s tax plan, House Republicans are expressing deep reservations about the Senate’s ability to get the job done.

Lawmakers stung over the failure to pass ObamaCare repeal worry the same fate could befall the tax measure if a handful of senators raise objections.

Donald Trump won with an electoral landside and his three big campaign points were ObamaCare repeal, tax reform and border security. For a handful of senators to derail that agenda is very frustrating,” said Rep. Blake Farenthold (R-Texas).

Rep. Tom Cole (R-Okla.), who is close to the House GOP leadership, says colleagues are frustrated with a handful of senators “overruling the will of the entire House.”

“We do need to see them step up and actually deliver for a change. We have over 200 bills sitting stalled over there. They haven’t been able to deliver on [health care] reform and they all ran on it and now we have a do-or-die moment on tax reform,” he said.

There’s also a sense among House Republicans that their Senate brethren aren’t under the same pressure to get results — perhaps because the GOP’s majority in the Senate is seen as safer in the 2018 midterm elections than the House majority.

“They put our majority in jeopardy with their failure on health care, more than they did their own,” Cole said.

While Republicans have a bigger majority in the House than in the Senate, the political map favors the Senate GOP in 2018.

Republicans only have to defend nine seats next year, and only one — held by Sen. Dean Heller (R-Nev.) — is in a state won by 2016 Democratic presidential nominee Hillary Clinton. Democrats are defending more than 20 seats, including 10 in states won by Trump.

In the House, Republicans represent 23 districts carried by Clinton, just shy of what Democrats would need to win to take back the majority.

Republicans are excited about moving to tax reform, and Trump’s plan received enthusiastic support at a half-day private retreat the House GOP held Wednesday to review it.

The president’s proposals to eliminate the estate tax and the alternative minimum tax received ovations.

But the mood turned more somber when Rep. Bruce Poliquin (R-Maine) stood up to ask if the Senate could be counted on to pass tax legislation, according to people familiar with the meeting.

A spokesman for Poliquin did not respond to a request for comment.

“A lot of House members trust a lot of senators to introduce their own tax reform bills,” said Rep. Steve King (R-Iowa), alluding to how senators seek to show independence by offering their own bills.

House Republicans say they can easily see GOP Sens. Susan Collins(Maine), John McCain (Ariz.) and Lisa Murkowski (Alaska), who all voted against a slimmed-down ObamaCare repeal bill in July, bucking the leadership again.SPONSORED BY NEXT ADVISOR

“I do not understand what motivates John McCain,” King said. “I don’t know what goes on in the minds of folks from Maine.”

Earlier this year, in an illustration of the frustration House Republicans hold for the Senate hold-outs, Farenthold joked about challenging Collins to a duel. He later apologized.

McCain later told The Hill that the health-care bill was doomed because it’s virtually impossible to tackle something as huge as reform as health care on a partisan basis.

“If you’re going to pass a major reform, you got to have bipartisan support,” he said.

Speaker Paul Ryan (R-Wis.) is making the case that Senate Republicans are more likely to come through on tax reform because McConnell and Senate Finance Committee Chairman Orrin Hatch (R-Utah) have already negotiated a tax reform framework with the administration and House leaders.

“What we did differently in this go around is we spent the last four months basically working together, the Senate Finance Committee, the House Ways and Means Committee and the White House, making sure that we’re on the same page,” Ryan told CNBC’s “Squawk Box” on Thursday morning.

Ryan explained that leaders made sure they did “the hard lifting, the tough work ahead of schedule, ahead of rollout.”

But he also acknowledged that House Republicans have just about run out of patience with the Senate after the collapse of health care reform this week.

“We’re really frustrated. Look, we passed 373 bills here in the House — 270-some are still in the Senate,” he said.

Already there are doubts that Senate Republicans will stick to the plan on taxes.

Hatch, who heads the Senate’s tax writing panel, told reporters Thursday afternoon that he would like to keep in place the deduction for state and local taxes, which the administration wants to eliminate to provide revenue for lower rates.

A spokeswoman for the Finance Committee said, “Chairman Hatch recognizes that every major provision within the tax code has an important constituency and consequence.”

http://thehill.com/homenews/senate/352999-distrust-of-senate-grows-within-gop

Key Findings

  • This year, Tax Freedom Day falls on April 23rd, 113 days into the year.
  • Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.
  • Americans will pay $3.5 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total bill of more than $5.1 trillion, or 31 percent of the nation’s income.
  • Americans will collectively spend more on taxes in 2017 than they will on food, clothing, and housing combined.
  • If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 14 days later, on May 7.

What Is Tax Freedom Day?

Tax Freedom Day® is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. Tax Freedom Day takes all federal, state, and local taxes—individual as well as payroll, sales and excise, corporate and property taxes—and divides them by the nation’s income. In 2017, Americans will pay $3.5 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total tax bill of $5.1 trillion, or 31 percent of national income. This year, Tax Freedom Day falls on April 23, 113 days into the year.

What Taxes Do We Pay?

This year, Americans will work the longest—46 days—to pay federal, state, and local individual income taxes. Payroll taxes will take 26 days to pay, followed by sales and excise taxes (15 days), corporate income taxes (10 days), and property taxes (10 days). The remaining six days are spent paying estate and inheritance taxes, customs duties, and other taxes.

When Is Tax Freedom Day if You Include Federal Borrowing?

Since 2002, federal expenses have surpassed federal revenues, with the budget deficit exceeding $1 trillion annually from 2009 to 2012. In calendar year 2017, the deficit is expected to shrink slightly, from $657 billion to $612 billion. If we include this annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur on May 7, 14 days later. The latest ever deficit-inclusive Tax Freedom Day occurred during World War II, on May 25, 1945.

When Is My State’s Tax Freedom Day?

The total tax burden borne by residents across states varies considerably due to differing tax policies and the progressivity of the federal tax system. This means that states with higher incomes and higher taxes celebrate Tax Freedom Day later: Connecticut (May 21), New Jersey (May 13), and New York (May 11). Residents of Mississippi bear the lowest average tax burden in 2017, with their Tax Freedom Day having arrived on April 5. Also early were Tennessee (April 7) and South Dakota (April 8).

2017 Tax Freedom Day - State Dates

How Has Tax Freedom Day Changed over Time?

The latest ever Tax Freedom Day was May 1, 2000; in that year, Americans paid 33 percent of their total income in taxes. A century earlier, in 1900, Americans paid only 5.9 percent of their income in taxes, so that Tax Freedom Day came on January 22.

Tax Freedom Day Over Time

Methodology

In the denominator, we count every dollar that is officially part of net national income according to the Department of Commerce’s Bureau of Economic Analysis. In the numerator, we count every payment to the government that is officially considered a tax. Taxes at all levels of government—federal, state, and local—are included in the calculation. In calculating Tax Freedom Day for each state, we look at taxes borne by residents of that state, whether paid to the federal government, their own state or local governments, or governments of other states. Where possible, we allocate tax burdens to each taxpayer’s state of residence. Leap days are excluded, to allow comparison across years, and any fraction of a day is rounded up to the next calendar day

https://taxfoundation.org/publications/tax-freedom-day/

Feds Collect Record Taxes Through August; Still Run $673.7B Deficit

By Terence P. Jeffrey | September 13, 2017 | 4:28 PM EDT

(CNSNews.com) – The federal government collected record total tax revenues through the first eleven months of fiscal 2017 (Oct. 1, 2016 through the end of August), according to the Monthly Treasury Statement.

Through August, the federal government collected approximately $2,966,172,000,000 in total tax revenues.

That was $8,450,680,000 more (in constant 2017 dollars) than the previous record of $2,957,721,320,000 in total tax revenues (in 2017 dollars) that the federal government collected in the first eleven months of fiscal 2016.

At the same time that the federal government was collecting a record $2,966,172,000,000 in tax revenues, it was spending $3,639,882,000,000—and, thus, running a deficit of $673,711,000,000.

Individual income taxes have provided the largest share (47.9 percent) of federal revenues so far this fiscal year. From Oct. 1 through the end of August, the Treasury collected $1,421,997,000,000 in individual income taxes.

Payroll taxes provided the second largest share (35.9 percent), with the Treasury collecting $1,065,751,000,000 in these taxes.

The $233,631 in corporate income taxes collected in the first eleven months of fiscal 2017 equaled only 8.6 percent of total tax collections.

The $21,172,000,000 collected in estate and gift taxes equaled only 0.71 percent of total taxes collected this fiscal year.

(Tax revenues were adjusted to constant 2017 using the Bureau of Labor Statistics inflation calculator.)

The Latest: State legislatures ‘dismayed’ by GOP tax plan

WASHINGTON (AP) — The Latest on the Republican plan to overhaul the tax code (all times local):

4:40 p.m.

An organization that advocates for state legislatures says it’s “dismayed” the Republican tax cut proposal unveiled Wednesday would do away with a deduction for state and local taxes paid.

The National Conference of State Legislatures says the deduction has existed in the federal tax code since its inception. The group says “tens of millions of middle-class taxpayers of every political affiliation” would experience a greater tax burden if the deduction were eliminated.

The group says the deduction’s elimination will also impede states in their efforts to invest in education and other public services.

About a third of tax filers itemize deductions on their federal income tax returns. The Tax Policy Center says virtually all who do claim a deduction for state and local taxes paid.

___

4:10 p.m.

President Donald Trump is issuing a warning shot to Indiana’s Democratic senator: Support my tax overhaul or I’ll campaign against you next year.

Trump says at a tax event in Indiana that if Sen. Joe Donnelly doesn’t approve the plan, “we will come here and we will campaign against him like you wouldn’t believe.”

But Trump is predicting that numerous Democrats will come across the aisle and support his plan “because it’s the right thing to do.”

The president has made overtures to Democratic senators like Claire McCaskill of Missouri and Heidi Heitkamp of North Dakota in recent weeks. All three are facing re-election in 2018.

___

4 p.m.

Small business advocates are split over the draft of the new Republican tax plan.

The National Federation of Independent Business is praising the proposal to tax business income at 20 percent — including sole proprietors whose business income is taxed at individual rates up to 39.6 percent.

The Small Business & Entrepreneurship Council says the plan would simplify business taxes, encourage business investment and increase owners’ confidence.

But the Small Business Majority says the plan wouldn’t help most small companies, and the current top rate is paid by less than 2 percent of those businesses.

And John O’Neill, a tax analyst at the American Sustainable Business Council, says tax reform isn’t as useful to the economy as investing in infrastructure and education.

President Donald Trump is calling the current tax system a “relic” and a “colossal barrier” that’s standing in the way of the nation’s economic comeback.

Trump says at an event in Indianapolis that his tax proposal will help middle-class families save money and will eliminate loopholes that benefit the wealthy.

Trump says the wealthy “can call me all they want. It’s not going to help.” The billionaire president says he’s “doing the right thing. And it’s not good for me, believe me.”

The president says under his plan, “the vast majority of families will be able to file their taxes on a single sheet of paper.”

__

3:40 p.m.

President Donald Trump is making the case for a sweeping plan to overhaul the tax system for individuals and corporations. He calls it a “once in a generation” opportunity to cut taxes.

The president says in Indiana that he wants to cut taxes for middle-class families to make the system simpler and fairer.

Trump says his tax plan will “bring back the jobs and the wealth that have left our country.” He says it’s time for the nation to fight for American workers.

He’s praising his vice president, Mike Pence, Indiana’s former governor. Trump says, “it’s time for Washington to learn from the wisdom of Indiana.”

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2:52 p.m.

A budget watchdog group in Washington says the new GOP tax plan could cost $2.2 trillion over the next 10 years.

The Committee for a Responsible Federal Budget admits its estimate is very preliminary since so many details are unclear, but its take is that the plan contains about $5.8 trillion in tax cuts but only $3.6 trillion worth of offsetting tax increases. That $2.2 trillion would be added to the nation’s $20 trillion debt.

That’s more than the $1.5 trillion debt cost that has emerged in a deal among Senate Republicans.

Republicans controlling Congress initially promised that the overhaul of the tax code wouldn’t add to the debt. The group also notes that the $2.2 trillion cost could grow by another $500 billion when interest costs are added in.

_____

1:54 p.m.

President Donald Trump says he’s always wanted to reduce the corporate tax rate to 20 percent — even though he said repeatedly he wanted to see it lowered to 15 percent.

Trump told reporters as he departed Washington for Indiana on Wednesday afternoon that a 20 percent rate was his “red line” and that it had always been his goal.

“In fact, I wanted to start at 15 so that we got 20,” he said, adding: “20′s my number.”

Trump also denies the plan unveiled by the White House and congressional Republicans Wednesday would benefit the wealthy.

He says: “I think there’s very little benefit for people of wealth.”

Under the plan, corporations would see their top tax rate cut from 35 percent to 20 percent.

____

1:37 p.m.

A vocal group of the most conservative House Republicans has come out in support of a draft tax plan endorsed by both President Donald Trump and top congressional GOP leaders.

The House Freedom Caucus endorsement is noteworthy because it could ease House passage of a budget plan that’s the first step to advancing the tax cut measure through Congress.

The group says the outline will allow workers to “keep more of their money,” while simplifying the loophole-choked tax code and making U.S. companies more competitive with their foreign rivals.

The group had held up action on the budget measure as they demanded more details on taxes.

_____

11:21 a.m.

President Donald Trump has two red lines that he refuses to cross on overhauling taxes: the corporate rate must be cut to 20 percent and the savings must go to the middle class.

Gary Cohn, the president’s top economics aide, says any overhaul signed by the president needs to include these two elements.

Trump had initially pushed for cutting the 39.6 percent corporate tax rate to 15 percent.

The administration says that the benefits of any tax cut will not favor the wealthy, with Cohn saying that an additional tax bracket could be added to levy taxes on the top one percent of earners if needed.

_____

11:20 a.m.

The Senate’s top Democrat is blasting a new tax cut plan backed by President Donald Trump as a giveaway to the rich.

Sen. Chuck Schumer says Trump’s plan only gives “crumbs” to the middle class, while top-bracket earners making more than a half-million dollars a year would reap a windfall.

The New York Democrat also blasted the plan for actually increasing the bottom tax rate from 10 percent to 12 percent, calling it a “punch to the gut of working Americans.”

Schumer said the plan is little more than an “across-the-board tax cut for America’s millionaires and billionaires.”

The plan, to be officially released Wednesday afternoon, is the top item on Washington’s agenda after the GOP failure to repeal the Obama health care law.

_____

9:53 a.m.

A new Republican blueprint for overhauling the U.S. tax code employs the themes of economic populism that President Donald Trump trumpeted during the presidential campaign to win support from working-class voters.

A copy of the plan to be released later Wednesday says, “Too many in our country are shut out of the dynamism of the U.S. economy.” That’s led to what the plans says is “the justifiable feeling that the system is rigged against hardworking Americans.”

The plan, obtained by The Associated Press, says the Trump administration and Congress “will work together to produce tax reform that will put America first.”

The GOP plan for the first major rewrite of the U.S. tax code in 30 years also says corporations will be stopped from shipping jobs and capital overseas.

_____

9:20 a.m.

President Donald Trump and congressional Republicans are proposing a tax plan that they say will be simple and fair.

In a document obtained by The Associated Press on Wednesday, they outline a blueprint for almost doubling the standard deduction for married taxpayers filing jointly to $24,000, and $12,000 for individuals.

The plan calls for cutting the corporate tax rate from 35 percent to 20 percent. The GOP proposal also calls for reducing the number of tax brackets from seven to three with a surcharge on the wealthiest Americans.

The plan also leaves intact the deduction for mortgage interest and charitable deductions.

The White House and Republicans plan a formal roll out later Wednesday.

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4:26 a.m.

President Donald Trump and congressional Republicans are rolling out a sweeping plan to cut taxes for individuals and corporations, simplify the tax system, and likely double the standard deduction used by most Americans.

Months in the making, the plan meets a political imperative for Republicans to deliver an overhaul of the U.S. tax code after the failure of the health care repeal.

The public reveal of the plan was set for Wednesday. The day before, details emerged on Capitol Hill while Trump personally appealed to House Republicans and Democrats at the White House to get behind his proposal.

https://apnews.com/f609602269d54524aa14e1d9c74ec97c

 

President Trump spoke about his administration’s tax reform plan in Indianapolis on Wednesday.CreditTom Brenner/The New York Times

WASHINGTON — The tax plan that the Trump administration outlined on Wednesday is a potentially huge windfall for the wealthiest Americans. It would not directly benefit the bottom third of the population. As for the middle class, the benefits appear to be modest.

The administration and its congressional allies are proposing to sharply reduce taxation of business income, primarily benefiting the small share of the population that owns the vast majority of corporate equity. President Trump said on Wednesday that the cuts would increase investment and spur growth, creating broader prosperity. But experts say the upside is limited, not least because the economy is already expanding.

The plan would also benefit Mr. Trump and other affluent Americans by eliminating the estate tax, which affects just a few thousand uber-wealthy families each year, and the alternative minimum tax, a safety net designed to prevent tax avoidance.

The precise impact on Mr. Trump cannot be ascertained because the president refuses to release his tax returns, but the few snippets of returns that have become public show one thing clearly: The alternative minimum tax has been unkind to Mr. Trump. In 2005, it forced him to pay $31 million in additional taxes.

Mr. Trump has also pledged repeatedly that the plan would reduce the taxes paid by middle-class families, but he has not provided enough details to evaluate that claim. While some households would probably get tax cuts, others could end up paying more.

https://tpc.googlesyndication.com/safeframe/1-0-10/html/container.html

The plan would not benefit lower-income households that do not pay federal income taxes. The president is not proposing measures like a reduction in payroll taxes, which are paid by a much larger share of workers, nor an increase in the earned-income tax credit, which would expand wage support for the working poor.

Indeed, to call the plan “tax reform” seems like a stretch — Mr. Trump himself told conservative and evangelical leaders on Monday that it was more apt to refer to his plan as “tax cuts.” Mr. Trump’s proposal echoes the large tax cuts that President Ronald Reagan, in 1981, and President George W. Bush, in 2001, passed in the first year of their terms, not the 1986 overhaul of the tax code that he often cites. Like his Republican predecessors, Mr. Trump says cutting taxes will increase economic growth.

Photo

The public portion of the debt equaled 24 percent of the gross domestic product in 1981 when President Ronald Reagan signed a tax cut at his vacation home near Santa Barbara, Calif. In June of this year, the debt equaled 75 percent of economic output. CreditAssociated Press

“It’s time to take care of our people, to rebuild our nation and to fight for our great American workers,” Mr. Trump told a crowd in Indianapolis.

But the moment is very different. Mr. Reagan and Mr. Bush cut taxes during recessions. Mr. Trump is proposing to cut taxes during one of the longest economic expansions in American history. It is not clear that the economy can grow much faster; the Federal Reserve has warned that it will seek to offset any stimulus by raising interest rates.

At the time of the earlier cuts, the federal debt was considerably smaller. The public portion of the debt equaled 24 percent of the gross domestic product in 1981, and 31 percent in 2001. In June, the debt equaled 75 percent of economic output.

The Trump administration insists that its tax cut will catalyze such an economic boom that money will flow into the federal coffers and the debt will not rise. The Reagan and Bush administrations made similar claims. The debt soared in both instances.

Another issue: Both Mr. Bush and Mr. Reagan proposed to cut taxes when federal revenues had climbed unusually high as a share of the national economy.

Mr. Trump wants to cut taxes while revenues are close to an average level.

Since 1981, federal revenue has averaged 17.1 percent of the nation’s gross domestic product, while federal spending has averaged 20.3 percent.

Last year’s numbers were close to the long-term trend: Federal revenue was 17.5 percent of gross domestic product; spending was 20.7 percent.

Martin Feldstein, a Harvard University economics professor and a longtime adviser to Republican presidents, said that the moment was not perfect, but that Mr. Trump should nevertheless press ahead because the changes would be valuable.

“The debt is moving in the wrong direction,” Mr. Feldstein said. “But the tax reform is moving in the right direction.”

Proponents of the plan assert that the largest benefits are indirect. In particular, they argue that cutting corporate taxes will unleash economic growth.

Mr. Trump’s plan is more focused on business tax cuts than the Reagan and Bush plans, and economists agree that this makes economic gains more likely.

The key elements are large reductions in the tax rates for business income: To 20 percent for corporations, and to 25 percent for “pass-through” businesses, a broad category that includes everything from mom-and-pop neighborhood shops to giant investment partnerships, law firms — and real estate developers.

The plan also lets businesses immediately deduct the full cost of new investments.

“You’re going to get a boost in investment,” said William Gale, co-director of the nonpartisan Tax Policy Center. “It’s hard to argue that there won’t be a positive effect.”

But Mr. Gale added that there are reasons to think it would be modest.

The most important is that the economy is already growing at a faster pace than the Fed considers sustainable. “Economy roaring,” Mr. Trump tweeted on Wednesday.

Photo

After President George W. Bush’s 2001 tax cuts, the wealthiest Americans paid 34.7 percent of their income in taxes, while Americans in the middle income brackets paid 16.1 percent. CreditRon Edmonds/Associated Press

Also, interest rates are low, and nonfinancial companies are sitting on $1.84 trillion that they don’t want to spend. “It’s not lack of funds that’s stopping companies from investing,” Mr. Gale said.

And the stimulus would come at the cost of increased federal borrowing. Interest rates might not rise if foreigners provide the necessary money, as happened in the 1980s and the 2000s, but that means some of the benefits also end up abroad.

It’s a venerable principle that lower tax rates encourage corporate investment. But a study of a 2003 cut in the tax rate on corporate dividendsfound no discernible impact on investment. The finding would not have surprised Mr. Bush’s Treasury secretary at the time, Paul O’Neill, who was fired for opposing the plan. “You find somebody who says, ‘I do more R & D because I get a tax credit for it,’ you’ll find a fool,” Mr. O’Neill, a former Alcoa chairman, said at the time.

Mr. Trump’s plan also continues a long-term march away from progressive taxation. The federal income tax is the centerpiece of a longstanding bipartisan consensus that wealthy Americans should pay an outsize share of the cost of government.

But successive rounds of tax cuts have eroded that premise, according to research by the economists Thomas Piketty of the Paris School of Economics and Emmanuel Saez of the University of California at Berkeley. In 1980, the wealthiest Americans paid 59 percent of their income in taxes while the middle 20 percent of Americans paid 24.5 percent. After the Bush tax cuts, the wealthiest Americans paid 34.7 percent of their income in taxes, while Americans in the middle income brackets paid 16.1 percent.

Under President Barack Obama, Congress increased taxation of upper-income households. Mr. Trump is seeking to resume the long-term trend toward flattening the curve. Upper-income households would get large tax cuts; lower-income households would get none.

The exact impact on the middle class is not yet clear. The outline released Wednesday proposes new tax brackets but does not specify income thresholds. It also proposes to replace the current tax deduction for each dependent with a child tax credit — but the administration did not propose a dollar amount for that new credit.

 

The administration said Wednesday that it was committed “to ensure that the reformed tax code is at least as progressive as the existing tax code.” That language, however, applies only to personal income taxes. The proposed reduction of business taxes and the elimination of the estate tax would both disproportionately benefit wealthy Americans.

“I don’t think there’s any way to justify this as a progressive proposal,” said Lily Batchelder, a law professor at New York University who served as deputy director of Mr. Obama’s National Economic Council. “In broad brush strokes, they’re doing nothing for the bottom 35 percent, they’re doing very little and possibly raising taxes on the middle class, and they’ve specified tax cuts for the wealthy.”

 

Tax reform: Trump, GOP mull surcharge on wealthy, doubling standard deduction

President Donald Trump speaks during a meeting with members of the House Ways and Means committee in the Roosevelt Room of the White House, Tuesday, Sept. 26, 2017, in Washington. (AP Photo/Evan Vucci)(<cite>Evan Vucci</cite>)
President Donald Trump speaks during a meeting with members of the House Ways and Means committee in the Roosevelt Room of the White House, Tuesday, Sept. 26, 2017, in Washington. (AP Photo/Evan Vucci)(Evan Vucci)

WASHINGTON (AP) — President Donald Trump and congressional Republicans are considering an income tax surcharge on the wealthy and doubling the standard deduction given to most Americans, with the GOP under pressure to overhaul the tax code after the collapse of the health care repeal.

On the eve of the grand rollout of the plan, details emerged on Capitol Hill on Tuesday while Trump personally appealed to House Republicans and Democrats at the White House to get behind his proposal.

“We will cut taxes tremendously for the middle class. Not just a little bit but tremendously,” Trump said as he met with members of the tax-writing Ways and Means Committee. He predicted jobs “will be coming back in because we have a non-competitive tax structure right now and we’re going to go super competitive.”

Among the details: repeal of the tax on multimillion-dollar estates, a reduction in the corporate rate from 35 percent to 20 percent and potentially four tax brackets, down from the current seven. The current top rate for individuals, those earning more than $418,000 a year, is 39.6 percent.

The goal is a more simple tax code that would spur economic growth and make U.S. companies more competitive. Delivering on the top legislative goal will be crucial for Republicans intent on holding onto their majorities in next year’s midterm elections.

The tax overhaul plan assembled by the White House and GOP leaders, which would slash the rate for corporations, aims at the first major revamp of the tax system in three decades. It would deliver a major Trump campaign pledge.

The outlines of the plan were described by GOP officials who demanded anonymity to disclose private deliberations.

The plan would likely cut the tax rate for the wealthiest Americans from 39.6 percent to 35 percent. A new surcharge on wealthy taxpayers might soften the appearance of the wealthiest Americans and big corporations benefiting from generous tax cuts.

Republicans already were picking at the framework, pointing up how divisions within GOP ranks can complicate efforts to overhaul taxes as has happened with the series of moves to repeal the Obama health care law.

Details of the proposal crafted behind closed doors over months by top White House economic officials, GOP congressional leaders and the Republican heads of tax-writing panels in the House and Senate were set to be released Wednesday. Trump and the Republicans were putting the final touches on the plan when the Democrats were brought in. A senior Democrat saw it as the opening of negotiations.

Trump had previously said he wanted a 15 percent rate for corporations, but House Speaker Paul Ryan has called that impractically low and has said it would risk adding to the soaring $20 trillion national debt.

Trump said Tuesday some of the components included doubling the standard deduction used by families and increasing the child tax credit. He said the majority of Americans would be able to file their taxes on a single page. “We must make our tax code simple and fair. It’s too complicated,” Trump said.

Some conservative GOP lawmakers, meanwhile, dug their heels in on the shape of the plan.

Rep. Mark Meadows, head of the House Freedom Caucus, said he’d vote against tax legislation if it provided for a corporate tax rate over 20 percent, a rate for small businesses higher than 25 percent, or if it fails to call for a doubling of the standard deduction.

“That’s the red line for me,” Meadows said at a forum of conservative lawmakers. He noted he was speaking personally, not as head of the conservative grouping.

Disgruntlement came from Sen. John Kennedy, R-La., over the process of putting together the plan.

“I get that we want to move to 3 percent but I’d like to know how,” Kennedy said referring to Trump’s ambitious goal of annual growth in the economy through tax cuts. “I’m not much into all the secrecy,” he said. “We need to do this by November, and at the rate we’re going I’m not encouraged right now.”

The Democrats, while acknowledging the tax system should be simplified, have insisted that any tax relief should go to the middle class, not the wealthiest. Tax cuts shouldn’t add to the ballooning debt, the Democrats say.

Rep. Richard Neal of Massachusetts, the top Democrat on the Ways and Means Committee, came away from the White House meeting in a negotiating mood. “This is when the process gets kicked off,” Neal told reporters at the Capitol.

The rate for wealthiest taxpayers shouldn’t be reduced, he said. Democrats are concerned by indications from Trump and his officials that “they intend to offer tax relief to people at the top,” he said.

Still, there may be room to negotiate over the Republicans’ insistence on repealing the estate tax, Neal indicated, since “there are other things you can do with it” to revise it short of complete elimination.

http://www.syracuse.com/politics/index.ssf/2017/09/tax_reform_trump_gop_mull_surcharge_on_wealthy_doubling_standard_deduction.html

9 ways Trump’s tax plan is a gift to the rich, including himself

President Trump and congressional Republicans keep saying their tax plan doesn’t help the rich. But that’s not true.

The nine-page outline released Wednesday is full of goodies that will make millionaires and billionaires happy. Republicans say it’s a starting point, but it would have to be turned on its head to be anything other than a windfall for the wealthy. In fact, in nine pages, The Washington Post counts at least nine ways the wealthy benefit, including Trump himself. Here’s our list:

1) A straight-up tax cut for the rich. The top tax rate in the United States is 39.6 percent. Trump and GOP leaders propose lowering that to 35 percent. It’s also worth noting the 39.6 percent tax rate applies only to income above $418,400 for singles and $470,700 for married couples. The outline doesn’t specify what income level the new 35 percent rate would kick in at. It’s possible the rich will get an every bigger tax cut if the final plan raises that threshold.

2) The estate tax goes bye-bye. Trump likes to call the estate tax the “death tax.” At the moment, Americans who pass money, homes or other assets on to heirs when they die pay a 40 percent tax. But here’s the important part Trump leaves out: The only people who have to pay this tax are those passing on more than $5.49 million. (And a married couple can inherit nearly $11 million without paying the tax.)

September 28 at 12:45 PM

Trump frequently claims the estate tax hurts farmers and small-business owners. But as The Post’s Fact Checker team points out, only 5,500 estates will pay any estate tax at all in 2017 (out of about 3 million estates). And of those 5,500 hit with the tax, only 80 (yes, you read that right) are farms or small businesses.

3) Hedge funds and lawyers get a special tax break. The plan calls for the tax rate on “pass-through entities” to fall from 39.6 percent to 25 percent. Republicans claim this is a tax break for small-business owners because “pass-through entities” is an umbrella term that covers the ways most people set up businesses: sole proprietorships, partnerships and S corporations. But the reality is, most small-business owners (more than 85 percent) already pay a tax rate of 25 percent or less, according to the Brookings Institution.

Only 3 percent pay a rate greater than 30 percent. That 3 percent includes doctors, lawyers, hedge fund managers and other really well-off people. Instead of paying a 35 percent income tax, these rich business owners would be able to pass off their income as business income and pay only a 25 percent tax rate. (The tax outline released Wednesday “contemplates” that Congress “will adopt measures to prevent” this kind of tax dodging. But there’s no guarantee that will happen).

4) The AMT is over. Republicans want to kill the alternative minimum tax, a measure put in place in 1969 to ensure the wealthy aren’t using a bunch of loopholes and credits to lower their tax bills to paltry sums. The AMT starts to phase in for people with earnings of about $130,000, but the vast majority of people subject to the AMT earn over $500,000, according to the nonpartisan Tax Policy Center.

Trump himself would benefit from repealing the AMT. As The Post’s Fact Checker team notes, Trump’s leaked tax return from 2005 shows that the AMT increased his tax bill from about $5.3 million to $36.5 million. In 2005 alone, he potentially could have saved $31 million.

5) The wealthy get to keep deducting mortgage interest. Only about 1 in 4 taxpayers claims the mortgage interest deduction, the Brookings Institution says. “Upper-income households primarily benefit from the subsidy,” wrote Brookings scholar Bruce Katz in a report last year. In fact, the wealthy can deduct interest payments on mortgages worth up to $1 million. There have been many calls over the years to lower that threshold, but the Trump tax plan is keeping it in place.

The GOP is doing this even though the tax cuts would add to the United States’ debt, since it doesn’t raise enough revenue to offset all the money lost from the new tax breaks. The outline also calls for the charitable deduction to stay, another deduction used heavily by the top 1 percent.

6) Stockholders are going to be very happy. Trump is calling for a super-low tax rate on the money big businesses such as Apple and Microsoft bring back to the United States from overseas, a process known as “repatriation.” Trump argues companies will use all this money coming home to build new U.S. factories. But the last time the United States did this, in the early 2000s, it ended up being a big win for people who own stocks. Companies simply took most of the money and gave it to shareholders in the form of dividends and share buybacks.

Guess what? Just about everyone (outside the White House) predicts the same thing will happen again. Corporations are even admitting it.

7) The favorite tax break of hedge fund billionaires is still safe. There’s no mention in the tax-overhaul rubric of “carried interest.” Those two words make most people’s eyes glaze over, but they are a well-known tax-dodging trick for millionaires and billionaires on Wall Street. Hedge fund and private-equity managers earn most of their money from their investments doing well. But instead of paying income taxes on all that money at a rate of 39.6 percent, the managers are able to claim it as “carried interest” so they can pay tax at the low capital gains rate of 20 percent.

Trump called this totally unfair on the campaign trail. During the primaries, he said he would eliminate this loophole because hedge fund managers were “getting away with murder.” But that change didn’t end up in the GOP plan.

8) Capital gains taxes stay low. The nine-page document also says nothing about capital gains, the tax rate people pay when they finally sell a stock or asset after holding on to it for many years. At the moment, the wealthiest Americans pay a 20 percent capital gains rate. Trump and Republican leaders aren’t proposing any changes to that, even though it is a popular way for millionaires to lower their tax bill.

9) The Obamacare investment tax goes away. The Affordable Care Act put in place a 3.8 percent surcharge on investment income (known formally as the Net Investment Income Tax). It applies only to individuals earning more than $200,000 a year and married couples earning more than $250,000. There’s no mention of this tax in the outline released this week, but Republicans clearly want to get rid of it. Repealing it was part of the GOP health-care bills that failed to pass Congress in recent weeks. One way or another, Republicans are likely to roll back this tax.

When reporters asked Trump whether the tax plan would help him personally, he quickly said no.

“No, I don’t benefit. I don’t benefit,” Trump said. “In fact, very, very strongly, as you see, I think there’s very little benefit for people of wealth.”

Rep. Kevin Brady (R-Tex.), who was part of the team that worked with the White House to craft the tax-overhaul outline, was asked a similar question on Fox News. He, too, said this plan does little to help the rich.

“I think those who benefit most are middle-class families struggling to keep every dollar they earn,” Brady told Fox News.

But one look at this plan tells a very different story. It gives an outright tax cut to the wealthiest Americans and it preserves almost all of the most popular loopholes they use to reduce their tax bills.

Sen. Patrick J. Toomey (R-Pa.), a strong proponent of tax cuts, was more straightforward this week. He told reporters, “This is a supply-side approach,” another way of saying trickle-down economics.

Read more:

The GOP tax plan, explained in simplest possible terms

Fact-checking President Trump’s tax speech in Indianapolis

The one surefire way to grow your wealth in the U.S.

https://www.washingtonpost.com/news/wonk/wp/2017/09/28/9-ways-trumps-tax-plan-is-a-gift-to-the-rich-including-himself/?utm_term=.bb9dafe36550

The GOP tax plan, explained in simplest possible terms

The big tax code makeover President Trump and Republicans have been promising for months is finally out.

It’s nine pages long. That may sound like a lengthy document, but the final bill in Congress will be hundreds of pages. What the White House released today is a framework. It’s a summary of what top Trump officials and congressional Republican leaders have agreed to so far. The Trump administration says it’s the job of Congress to flesh out the specifics.

Here are the key takeaways:

  • The plan will likely add to America’s $20 trillion debt. There are lots of tax cuts spelled out. There are almost no loopholes eliminated.
  • The rich make out pretty well. The White House vows poor people won’t have to pay more than they do now, but there are few specifics in the plan so far to ensure that.
  • Businesses (both small and large) get major tax cuts.
  • Most people will pay lower taxes, although it’s unclear if the rich get a bigger break than the middle class.
  • There are still a lot of details Congress has to figure out.

What’s in there for the rich?
The wealthy get a tax cut. They will pay only 35 percent on their income taxes (down from 39.6 percent). At the moment, this rate applies to any income above about $418,000. It’s unclear if Congress will tinker with the income level that rate kicks in at. Trump says he would be fine with Congress raising taxes on the rich in the final plan, but he isn’t requiring that they do that.

The bigger tax break for the rich is the elimination of the estate tax, sometimes called the “death tax.” It’s the tax families currently pay when an asset like a house or ranch worth over $5.49 million is passed down to a heir after someone dies. Trump’s plan scraps this tax entirely.

What’s in there for the middle class?
This is the giant question mark. There’s a lot of details left for Congress to fill out. Under the plan, America will have just three tax rates: 35, 25 and 12 percent, but we don’t know yet which rate someone earning $50,000 or $80,000 will pay.

What we do know is the standard deduction (currently $6,350 for individuals and $12,700 for married couples) will nearly double. This means that a married couple earning $24,000 or less or an individual earning $12,000 or less won’t pay any taxes. But the plan also eliminates what’s known as the additional standard deduction and the popular personal exemption. Some filers may end up worse off after these changes.

The plan also promises a “significant increase” to the child tax credit (it’s currently $1,000 per child) and that middle class Americans can keep using the mortgage interest deduction as well as tax breaks for retirement savings (e.g. 401ks) and higher education. But it eliminates the state and local tax deduction, which is used by many in high-tax states like New York and California.

Can I really file my taxes on a postcard?
The “file on a postcard” idea was an exaggeration. The goal now is to get most people’s tax returns down to one page.

What about the working poor?
A senior White House official told journalists Tuesday, “We are committed to making the tax code at least as progressive as the current tax code.” Translation: The poor should not end up paying more than they do now. But it’s hard to check if that’s true because we still don’t have enough details.

In theory, increasing the standard deduction should mean that more Americans pay $0 in taxes, but it depends what happens to a lot of other tax provisions (and whether Congress ends up cutting safety net programs that help the poor to pay for tax cuts). Top Republican officials have not decided what to do with the Earned Income Tax Credit (EITC), which is widely used by the working poor to help them reduce their tax bill and even get a small amount of money back from the government.

What happens to the Alternative Minimum Tax?
The Alternative Minimum Tax (AMT) would go away under the plan. It currently applies mainly to individuals earning more than $130,000 and married couples earning more than $160,00. It was created in the 1970s to prevent wealthier families from taking so many tax breaks that they end up paying little to no taxes, but over the years, the AMT has impacted more and more families.

What happens to big businesses?
America’s large corporations will get a big tax cut. The top rate at the moment is 35 percent, one of the highest rates among developed nations. Most U.S. companies don’t pay that rate, but it is still a starting point. The Trump plan slashes the rate to 20 percent, just below the average of major developed countries the U.S. competes against.

The White House and Congress promised to close some loopholes that businesses currently enjoy, but no one is saying what those are yet. In fact, the only details we have show MORE business goodies, not less. The plan calls for businesses to be able to write off their investments (e.g. the cost of building a new factory) right away instead of crediting a little bit each year for several years. This is supposed to encourage companies to invest more, which will hopefully create more jobs.

What happens to small businesses?
Small businesses also get a tax cut under the plan. At the moment, many small business owners pay whatever their personal income tax rate is, so some end up paying as much as 39.6 percent. Under this plan, most “pass throughs” (code for small businesses) would pay at the 25 percent rate (the exception is if a small businesses earned very little income, they might be able to pay at the 12 percent rate).

There’s concern some rich people, especially hedge fund managers and consultants to the stars, will simply use this as a way to lower their tax bill. Instead of paying at the new 35 percent top income tax rate, they could say all their income is small business income and pay at the 25 percent rate. Trump has promised to fix that problem, but no one is sure how.

How will this plan help growth?
Trump’s big claim is that this tax overhaul will unleash economic growth. The United States has been growing at about 2 percent a year lately, below the historic norm. Trump keeps saying this plan will unleash growth of 3 percent — or more.

Economists, even those who work at Wall Street banks and for big companies, only project a modest boost to growth. Estimates range from 2.1 percent to 2.25 percent.

How much will this add to the debt?
Originally, Republican leaders said they would not add $1 to America’s debt, but that promise appears to be gone. The White House says it will go along with whatever price tag Congress allows. Right now, Senate Republicans have a deal to add $1.5 trillion to the debt over the next decade, so there’s a good chance this tax plan will add to the debt.

What are the pitfalls?
There’s a ton we don’t know yet. Many on the left are concerned this plan gives away too much to the rich and big businesses. Many across the political spectrum are alarmed that it will likely add to America’s already large debt.

https://www.washingtonpost.com/news/wonk/wp/2017/09/27/the-gop-tax-plan-explained-in-simplest-possible-terms/?tid=a_inl&utm_term=.4de9a2bfc9ce

Some tax breaks are for the rich.
Others for the poor. Which are for you?

The Republican tax reform plan is finally out – you can read the full document here. The framework touches on many parts of the tax code, but two critical areas are tax deductions and credits. These reduce how much taxpayers owe, but they affect income groups differently. How could the proposed changes to these policies affect your taxes?

Most beneficial tax deductions and exemptions, 2015

Deductions and exemptions reduce your tax bill by decreasing your taxable income.

Other deductionsState and local taxesCharitable contributionsReal estate taxesEmployee business expensesMedical/dental expensesHome mortgage interestStandard deductionPersonal and dependent exemptions$10,000$25,000$50,000$100,000$500,000Lower incomeHigher income$30,000 to $40,000
DEDUCTION MEAN DEDUCTION*
Personal and dependent exemptions (?) $7,700
Standard deduction (?) $7,100
Home mortgage interest (?) $700
Medical/dental expenses (?) $500
Employee business expenses (?) $400
Real estate taxes (?) $400
Charitable contributions (?) $300
State and local taxes (?) $200
Other deductions $200

* Mean deduction is the total deduction amount received by the income group divided by the number of returns in that group, including those that did not receive the deduction.

Note: Returns for those filing singly and those filing jointly or in other categories are lumped together. Tax returns cannot claim both the standard deductions and itemized deductions. Total deductions and exemptions can exceed adjusted gross income, but the excess does not affect taxes owed, as taxable income cannot drop below zero.

Taxpayers – except the highest earners – are currently eligible for tax “exemptions” to reduce their taxable income. In 2016, Americans could take a $4,050 personal exemption from their income (double if filing as a married couple), and then get additional exemptions for dependents.

After exemptions taxpayers can further reduce their taxable income by taking tax deductions. 69 percent of taxpayers in 2015 took the “standard deduction,” a fixed amount that is currently $6,300 for (most) taxpayers filing singly.

https://www.washingtonpost.com/graphics/2017/politics/tax-breaks/?utm_term=.09de159b6eeb

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The remaining taxpayers – mostly in higher income groups – “itemized” their tax returns, meaning they chose to take advantage of more specific tax deductions based on their expenses. The deductions came out to more than they would have gotten through the standard deduction.

Here’s what the Republican’s tax reform framework would change about deductions:

  • Republicans want to nearly double the standard deduction to $12,000 for those filing singly and $24,000 for those filing jointly. At the same time, the framework calls for the repeal of exemptions, consolidating these different parts of the tax system.
  • The framework aims to simplify the tax code by gutting many itemized deductions, although charitable contributions and mortgage interestwould be retained. That makes the state and local taxes deduction (SALT) a major target. SALT lets you deduct state and local income or sales taxes you owe from your federal taxable income and largely benefits blue states with higher taxes.

Most beneficial tax credits, 2015

Tax credits are subtracted directly from taxes owed.

Prior-year minimum tax creditGeneral business creditResidential energy creditsForeign tax creditChild care creditOther creditsAmerican opportunity creditNonrefundable education creditChild tax creditAdditional child tax creditEarned income credit$10,000$25,000$50,000$100,000$500,000Lower incomeHigher income$30,000 to $40,000
CREDIT MEAN CREDIT*
Earned income credit (?) $500
Additional child tax credit (?) $300
Child tax credit (?) $200
Nonrefundable education credit (?) $100
American opportunity credit (?) $100
Other credits $0
Child care credit (?) $0
Foreign tax credit (?) $0
Residential energy credits (?) $0
General business credit (?) $0
Prior-year minimum tax credit (?) $0

* Mean credit is the total credit amount received by the income group divided by the number of returns in that group, including those that did not receive the credit.

Note: Returns for those filing singly and those filing jointly or in other categories are lumped together.

Credits can reduce federal income taxes owed down to zero, but “refundable” credits can reduce them even more, allowing some taxpayers to receive a net gain from the federal government after filing.

Here’s what the Republican’s tax reform framework would change about credits:

  • The plan calls for an expansion of the child tax credit, increasing its value from the current $1,000 max and making it available to more income groups. The framework also proposes an additional $500 non-refundable credit for “non-child dependents.”
  • Like with deductions, the framework calls for the repeal of “numerous other” credits to simplify the tax code but does not specify which policies will be targeted.

Just part of the picture

Of course, the tax policies we’re looking at above are just part of U.S. federal tax code. Actual income tax rates are central to tax reform proposals; the Republican tax reform framework would reduce the seven income brackets currently used to just three, lowering rates for many but increasing them for some in the lowest bracket. It also calls for the repeal of the estate tax.

The plan also proposes a large decrease in the corporate tax rate from 35 to 20 percent, among many other changes to the business tax code.

https://www.washingtonpost.com/graphics/2017/politics/tax-breaks/?utm_term=.09de159b6eeb

The Internal Revenue Service has recently released new data on individual income taxes for calendar year 2014, showing the number of taxpayers, adjusted gross income, and income tax shares by income percentiles.[1]

The data demonstrates that the U.S. individual income tax continues to be very progressive, borne mainly by the highest income earners.

  • In 2014, 139.6 million taxpayers reported earning $9.71 trillion in adjusted gross income and paid $1.37 trillion in individual income taxes.
  • The share of income earned by the top 1 percent of taxpayers rose to 20.6 percent in 2014. Their share of federal individual income taxes also rose, to 39.5 percent.
  • In 2014, the top 50 percent of all taxpayers paid 97.3 percent of all individual income taxes while the bottom 50 percent paid the remaining 2.7 percent.
  • The top 1 percent paid a greater share of individual income taxes (39.5 percent) than the bottom 90 percent combined (29.1 percent).
  • The top 1 percent of taxpayers paid a 27.1 percent individual income tax rate, which is more than seven times higher than taxpayers in the bottom 50 percent (3.5 percent).

Reported Income and Taxes Paid Both Increased Significantly in 2014

Taxpayers reported $9.71 trillion in adjusted gross income (AGI) on 139.5 million tax returns in 2014. Total AGI grew by $675 billion from the previous year’s levels. There were 1.2 million more returns filed in 2014 than in 2013, meaning that average AGI rose by $4,252 per return, or 6.5 percent.

Meanwhile, taxpayers paid $1.37 trillion in individual income taxes in 2014, an 11.5 percent increase from taxes paid in the previous year. The average individual income tax rate for all taxpayers rose from 13.64 percent to 14.16 percent. Moreover, the average tax rate increased for all income groups, except for the top 0.1 percent of taxpayers, whose average rate decreased from 27.91 percent to 27.67 percent.

The most likely explanation behind the higher tax rates in 2014 is a phenomenon known as “real bracket creep.” [2] As incomes rise, households are pushed into higher tax brackets, and are subject to higher overall tax rates on their income. On the other hand, the likely reason why the top 0.1 percent of households saw a slightly lower tax rate in 2014 is because a higher portion of their income consisted of long-term capital gains, which are subject to lower tax rates.[3]

The share of income earned by the top 1 percent rose to 20.58 percent of total AGI, up from 19.04 percent in 2013. The share of the income tax burden for the top 1 percent also rose, from 37.80 percent in 2013 to 39.48 percent in 2014.

Top 1% Top 5% Top 10% Top 25% Top 50% Bottom 50% All Taxpayers
Table 1. Summary of Federal Income Tax Data, 2014
Number of Returns 1,395,620 6,978,102 13,956,203 34,890,509 69,781,017 69,781,017 139,562,034
Adjusted Gross Income ($ millions) $1,997,819 $3,490,867 $4,583,416 $6,690,287 $8,614,544 $1,094,119 $9,708,663
Share of Total Adjusted Gross Income 20.58% 35.96% 47.21% 68.91% 88.73% 11.27% 100.00%
Income Taxes Paid ($ millions) $542,640 $824,153 $974,124 $1,192,679 $1,336,637 $37,740 $1,374,379
Share of Total Income Taxes Paid 39.48% 59.97% 70.88% 86.78% 97.25% 2.75% 100.00%
Income Split Point $465,626 $188,996 $133,445 $77,714 $38,173
Average Tax Rate 27.16% 23.61% 21.25% 17.83% 15.52% 3.45% 14.16%
 Note: Does not include dependent filers

High-Income Americans Paid the Majority of Federal Taxes

In 2014, the bottom 50 percent of taxpayers (those with AGIs below $38,173) earned 11.27 percent of total AGI. This group of taxpayers paid approximately $38 billion in taxes, or 2.75 percent of all income taxes in 2014.

In contrast, the top 1 percent of all taxpayers (taxpayers with AGIs of $465,626 and above) earned 20.58 percent of all AGI in 2014, but paid 39.48 percent of all federal income taxes.

In 2014, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. The top 1 percent of taxpayers paid $543 billion, or 39.48 percent of all income taxes, while the bottom 90 percent paid $400 billion, or 29.12 percent of all income taxes.

Figure 1.

High-Income Taxpayers Pay the Highest Average Tax Rates

The 2014 IRS data shows that taxpayers with higher incomes pay much higher average individual income tax rates than lower-income taxpayers.[4]

The bottom 50 percent of taxpayers (taxpayers with AGIs below $38,173) faced an average income tax rate of 3.45 percent. As household income increases, the IRS data shows that average income tax rates rise. For example, taxpayers with AGIs between the 10th and 5th percentile ($133,445 and $188,996) pay an average rate of 13.7 percent – almost four times the rate paid by those in the bottom 50 percent.

The top 1 percent of taxpayers (AGI of $465,626 and above) paid the highest effective income tax rate, at 27.2 percent, 7.9 times the rate faced by the bottom 50 percent of taxpayers.

Figure 2.

Taxpayers at the very top of the income distribution, the top 0.1 percent (with AGIs over $2.14 million), paid an even higher average tax rate, of 27.7 percent.

573 $442 $1,015 $458 $1,473 $318
1982 $1,876 $167 $398 $207 $605 $460 $1,065 $478 $1,544 $332
1983 $1,970 $183 $428 $217 $646 $481 $1,127 $498 $1,625 $344
1984 $2,173 $210 $482 $240 $723 $528 $1,251 $543 $1,794 $379
1985 $2,344 $235 $531 $260 $791 $567 $1,359 $580 $1,939 $405
1986 $2,524 $285 $608 $278 $887 $604 $1,490 $613 $2,104 $421
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987 $2,814 $347 $722 $316 $1,038 $671 $1,709 $664 $2,374 $440
1988 $3,124 $474 $891 $342 $1,233 $718 $1,951 $707 $2,658 $466
1989 $3,299 $468 $918 $368 $1,287 $768 $2,054 $751 $2,805 $494
1990 $3,451 $483 $953 $385 $1,338 $806 $2,144 $788 $2,933 $519
1991 $3,516 $457 $943 $400 $1,343 $832 $2,175 $809 $2,984 $532
1992 $3,681 $524 $1,031 $413 $1,444 $856 $2,299 $832 $3,131 $549
1993 $3,776 $521 $1,048 $426 $1,474 $883 $2,358 $854 $3,212 $563
1994 $3,961 $547 $1,103 $449 $1,552 $929 $2,481 $890 $3,371 $590
1995 $4,245 $620 $1,223 $482 $1,705 $985 $2,690 $938 $3,628 $617
1996 $4,591 $737 $1,394 $515 $1,909 $1,043 $2,953 $992 $3,944 $646
1997 $5,023 $873 $1,597 $554 $2,151 $1,116 $3,268 $1,060 $4,328 $695
1998 $5,469 $1,010 $1,797 $597 $2,394 $1,196 $3,590 $1,132 $4,721 $748
1999 $5,909 $1,153 $2,012 $641 $2,653 $1,274 $3,927 $1,199 $5,126 $783
2000 $6,424 $1,337 $2,267 $688 $2,955 $1,358 $4,314 $1,276 $5,590 $834
The IRS changed methodology, so data above and below this line not strictly comparable
2001 $6,116 $492 $1,065 $1,934 $666 $2,600 $1,334 $3,933 $1,302 $5,235 $881
2002 $5,982 $421 $960 $1,812 $660 $2,472 $1,339 $3,812 $1,303 $5,115 $867
2003 $6,157 $466 $1,030 $1,908 $679 $2,587 $1,375 $3,962 $1,325 $5,287 $870
2004 $6,735 $615 $1,279 $2,243 $725 $2,968 $1,455 $4,423 $1,403 $5,826 $908
2005 $7,366 $784 $1,561 $2,623 $778 $3,401 $1,540 $4,940 $1,473 $6,413 $953
2006 $7,970 $895 $1,761 $2,918 $841 $3,760 $1,652 $5,412 $1,568 $6,980 $990
2007 $8,622 $1,030 $1,971 $3,223 $905 $4,128 $1,770 $5,898 $1,673 $7,571 $1,051
2008 $8,206 $826 $1,657 $2,868 $905 $3,773 $1,782 $5,555 $1,673 $7,228 $978
2009 $7,579 $602 $1,305 $2,439 $878 $3,317 $1,740 $5,058 $1,620 $6,678 $900
2010 $8,040 $743 $1,517 $2,716 $915 $3,631 $1,800 $5,431 $1,665 $7,096 $944
2011 $8,317 $737 $1,556 $2,819 $956 $3,775 $1,866 $5,641 $1,716 $7,357 $961
2012 $9,042 $1,017 $1,977 $3,331 $997 $4,328 $1,934 $6,262 $1,776 $8,038 $1,004
2013 $9,034 $816 $1,720 $3,109 $1,034 $4,143 $2,008 $6,152 $1,844 $7,996 $1,038
2014 $9,709 $986 $1,998 $3,491 $1,093 $4,583 $2,107 $6,690 $1,924 $8,615 $1,094
Year Total Top 0.1% Top 1% Top 5% Between 5% & 10% Top 10% Between 10% & 25% Top 25% Between 25% & 50% Top 50% Bottom 50%
Table 4. Total Income Tax after Credits, 1980–2014 ($Billions)
Source: Internal Revenue Service.
1980 $249 $47 $92 $31 $123 $59 $182 $50 $232 $18
1981 $282 $50 $99 $36 $135 $69 $204 $57 $261 $21
1982 $276 $53 $100 $34 $134 $66 $200 $56 $256 $20
1983 $272 $55 $101 $34 $135 $64 $199 $54 $252 $19
1984 $297 $63 $113 $37 $150 $68 $219 $57 $276 $22
1985 $322 $70 $125 $41 $166 $73 $238 $60 $299 $23
1986 $367 $94 $156 $44 $201 $78 $279 $64 $343 $24
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987 $369 $92 $160 $46 $205 $79 $284 $63 $347 $22
1988 $413 $114 $188 $48 $236 $85 $321 $68 $389 $24
1989 $433 $109 $190 $51 $241 $93 $334 $73 $408 $25
1990 $447 $112 $195 $52 $248 $97 $344 $77 $421 $26
1991 $448 $111 $194 $56 $250 $96 $347 $77 $424 $25
1992 $476 $131 $218 $58 $276 $97 $374 $78 $452 $24
1993 $503 $146 $238 $60 $298 $101 $399 $80 $479 $24
1994 $535 $154 $254 $64 $318 $108 $425 $84 $509 $25
1995 $588 $178 $288 $70 $357 $115 $473 $88 $561 $27
1996 $658 $213 $335 $76 $411 $124 $535 $95 $630 $28
1997 $727 $241 $377 $82 $460 $134 $594 $102 $696 $31
1998 $788 $274 $425 $88 $513 $139 $652 $103 $755 $33
1999 $877 $317 $486 $97 $583 $150 $733 $109 $842 $35
2000 $981 $367 $554 $106 $660 $164 $824 $118 $942 $38
The IRS changed methodology, so data above and below this line not strictly comparable
2001 $885 $139 $294 $462 $101 $564 $158 $722 $120 $842 $43
2002 $794 $120 $263 $420 $93 $513 $143 $657 $104 $761 $33
2003 $746 $115 $251 $399 $85 $484 $133 $617 $98 $715 $30
2004 $829 $142 $301 $467 $91 $558 $137 $695 $102 $797 $32
2005 $932 $176 $361 $549 $98 $647 $145 $793 $106 $898 $33
2006 $1,020 $196 $402 $607 $108 $715 $157 $872 $113 $986 $35
2007 $1,112 $221 $443 $666 $117 $783 $170 $953 $122 $1,075 $37
2008 $1,029 $187 $386 $597 $115 $712 $168 $880 $117 $997 $32
2009 $863 $146 $314 $502 $101 $604 $146 $749 $93 $842 $21
2010 $949 $170 $355 $561 $110 $670 $156 $827 $100 $927 $22
2011 $1,043 $168 $366 $589 $123 $712 $181 $893 $120 $1,012 $30
2012 $1,185 $220 $451 $699 $133 $831 $193 $1,024 $128 $1,152 $33
2013 $1,232 $228 $466 $721 $139 $860 $203 $1,063 $135 $1,198 $34
2014 $1,374 $273 $543 $824 $150 $974 $219 $1,193 $144 $1,337 $38
Year Total Top 0.1% Top 1% Top 5% Between 5% & 10% Top 10% Between 10% & 25% Top 25% Between 25% & 50% Top 50% Bottom 50%
Table 5. Adjusted Gross Income Shares, 1980–2014 (percent of total AGI earned by each group)
Source: Internal Revenue Service.
1980 100% 8.46% 21.01% 11.12% 32.13% 24.57% 56.70% 25.62% 82.32% 17.68%
1981 100% 8.30% 20.78% 11.20% 31.98% 24.69% 56.67% 25.59% 82.25% 17.75%
1982 100% 8.91% 21.23% 11.03% 32.26% 24.53% 56.79% 25.50% 82.29% 17.71%
1983 100% 9.29% 21.74% 11.04% 32.78% 24.44% 57.22% 25.30% 82.52% 17.48%
1984 100% 9.66% 22.19% 11.06% 33.25% 24.31% 57.56% 25.00% 82.56% 17.44%
1985 100% 10.03% 22.67% 11.10% 33.77% 24.21% 57.97% 24.77% 82.74% 17.26%
1986 100% 11.30% 24.11% 11.02% 35.12% 23.92% 59.04% 24.30% 83.34% 16.66%
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987 100% 12.32% 25.67% 11.23% 36.90% 23.85% 60.75% 23.62% 84.37% 15.63%
1988 100% 15.16% 28.51% 10.94% 39.45% 22.99% 62.44% 22.63% 85.07% 14.93%
1989 100% 14.19% 27.84% 11.16% 39.00% 23.28% 62.28% 22.76% 85.04% 14.96%
1990 100% 14.00% 27.62% 11.15% 38.77% 23.36% 62.13% 22.84% 84.97% 15.03%
1991 100% 12.99% 26.83% 11.37% 38.20% 23.65% 61.85% 23.01% 84.87% 15.13%
1992 100% 14.23% 28.01% 11.21% 39.23% 23.25% 62.47% 22.61% 85.08% 14.92%
1993 100% 13.79% 27.76% 11.29% 39.05% 23.40% 62.45% 22.63% 85.08% 14.92%
1994 100% 13.80% 27.85% 11.34% 39.19% 23.45% 62.64% 22.48% 85.11% 14.89%
1995 100% 14.60% 28.81% 11.35% 40.16% 23.21% 63.37% 22.09% 85.46% 14.54%
1996 100% 16.04% 30.36% 11.23% 41.59% 22.73% 64.32% 21.60% 85.92% 14.08%
1997 100% 17.38% 31.79% 11.03% 42.83% 22.22% 65.05% 21.11% 86.16% 13.84%
1998 100% 18.47% 32.85% 10.92% 43.77% 21.87% 65.63% 20.69% 86.33% 13.67%
1999 100% 19.51% 34.04% 10.85% 44.89% 21.57% 66.46% 20.29% 86.75% 13.25%
2000 100% 20.81% 35.30% 10.71% 46.01% 21.15% 67.15% 19.86% 87.01% 12.99%
The IRS changed methodology, so data above and below this line not strictly comparable
2001 100% 8.05% 17.41% 31.61% 10.89% 42.50% 21.80% 64.31% 21.29% 85.60% 14.40%
2002 100% 7.04% 16.05% 30.29% 11.04% 41.33% 22.39% 63.71% 21.79% 85.50% 14.50%
2003 100% 7.56% 16.73% 30.99% 11.03% 42.01% 22.33% 64.34% 21.52% 85.87% 14.13%
2004 100% 9.14% 18.99% 33.31% 10.77% 44.07% 21.60% 65.68% 20.83% 86.51% 13.49%
2005 100% 10.64% 21.19% 35.61% 10.56% 46.17% 20.90% 67.07% 19.99% 87.06% 12.94%
2006 100% 11.23% 22.10% 36.62% 10.56% 47.17% 20.73% 67.91% 19.68% 87.58% 12.42%
2007 100% 11.95% 22.86% 37.39% 10.49% 47.88% 20.53% 68.41% 19.40% 87.81% 12.19%
2008 100% 10.06% 20.19% 34.95% 11.03% 45.98% 21.71% 67.69% 20.39% 88.08% 11.92%
2009 100% 7.94% 17.21% 32.18% 11.59% 43.77% 22.96% 66.74% 21.38% 88.12% 11.88%
2010 100% 9.24% 18.87% 33.78% 11.38% 45.17% 22.38% 67.55% 20.71% 88.26% 11.74%
2011 100% 8.86% 18.70% 33.89% 11.50% 45.39% 22.43% 67.82% 20.63% 88.45% 11.55%
2012 100% 11.25% 21.86% 36.84% 11.03% 47.87% 21.39% 69.25% 19.64% 88.90% 11.10%
2013 100% 9.03% 19.04% 34.42% 11.45% 45.87% 22.23% 68.10% 20.41% 88.51% 11.49%
2014 100% 10.16% 20.58% 35.96% 11.25% 47.21% 21.70% 68.91% 19.82% 88.73% 11.27%
Year Total Top 0.1% Top 1% Top 5% Between 5% & 10% Top 10% Between 10% & 25% Top 25% Between 25% & 50% Top 50% Bottom 50%
Table 6. Total Income Tax Shares, 1980–2014 (percent of federal income tax paid by each group)
Source: Internal Revenue Service.
1980 100% 19.05% 36.84% 12.44% 49.28% 23.74% 73.02% 19.93% 92.95% 7.05%
1981 100% 17.58% 35.06% 12.90% 47.96% 24.33% 72.29% 20.26% 92.55% 7.45%
1982 100% 19.03% 36.13% 12.45% 48.59% 23.91% 72.50% 20.15% 92.65% 7.35%
1983 100% 20.32% 37.26% 12.44% 49.71% 23.39% 73.10% 19.73% 92.83% 7.17%
1984 100% 21.12% 37.98% 12.58% 50.56% 22.92% 73.49% 19.16% 92.65% 7.35%
1985 100% 21.81% 38.78% 12.67% 51.46% 22.60% 74.06% 18.77% 92.83% 7.17%
1986 100% 25.75% 42.57% 12.12% 54.69% 21.33% 76.02% 17.52% 93.54% 6.46%
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987 100% 24.81% 43.26% 12.35% 55.61% 21.31% 76.92% 17.02% 93.93% 6.07%
1988 100% 27.58% 45.62% 11.66% 57.28% 20.57% 77.84% 16.44% 94.28% 5.72%
1989 100% 25.24% 43.94% 11.85% 55.78% 21.44% 77.22% 16.94% 94.17% 5.83%
1990 100% 25.13% 43.64% 11.73% 55.36% 21.66% 77.02% 17.16% 94.19% 5.81%
1991 100% 24.82% 43.38% 12.45% 55.82% 21.46% 77.29% 17.23% 94.52% 5.48%
1992 100% 27.54% 45.88% 12.12% 58.01% 20.47% 78.48% 16.46% 94.94% 5.06%
1993 100% 29.01% 47.36% 11.88% 59.24% 20.03% 79.27% 15.92% 95.19% 4.81%
1994 100% 28.86% 47.52% 11.93% 59.45% 20.10% 79.55% 15.68% 95.23% 4.77%
1995 100% 30.26% 48.91% 11.84% 60.75% 19.62% 80.36% 15.03% 95.39% 4.61%
1996 100% 32.31% 50.97% 11.54% 62.51% 18.80% 81.32% 14.36% 95.68% 4.32%
1997 100% 33.17% 51.87% 11.33% 63.20% 18.47% 81.67% 14.05% 95.72% 4.28%
1998 100% 34.75% 53.84% 11.20% 65.04% 17.65% 82.69% 13.10% 95.79% 4.21%
1999 100% 36.18% 55.45% 11.00% 66.45% 17.09% 83.54% 12.46% 96.00% 4.00%
2000 100% 37.42% 56.47% 10.86% 67.33% 16.68% 84.01% 12.08% 96.09% 3.91%
The IRS changed methodology, so data above and below this line not strictly comparable
2001 100% 15.68% 33.22% 52.24% 11.44% 63.68% 17.88% 81.56% 13.54% 95.10% 4.90%
2002 100% 15.09% 33.09% 52.86% 11.77% 64.63% 18.04% 82.67% 13.12% 95.79% 4.21%
2003 100% 15.37% 33.69% 53.54% 11.35% 64.89% 17.87% 82.76% 13.17% 95.93% 4.07%
2004 100% 17.12% 36.28% 56.35% 10.96% 67.30% 16.52% 83.82% 12.31% 96.13% 3.87%
2005 100% 18.91% 38.78% 58.93% 10.52% 69.46% 15.61% 85.07% 11.35% 96.41% 3.59%
2006 100% 19.24% 39.36% 59.49% 10.59% 70.08% 15.41% 85.49% 11.10% 96.59% 3.41%
2007 100% 19.84% 39.81% 59.90% 10.51% 70.41% 15.30% 85.71% 10.93% 96.64% 3.36%
2008 100% 18.20% 37.51% 58.06% 11.14% 69.20% 16.37% 85.57% 11.33% 96.90% 3.10%
2009 100% 16.91% 36.34% 58.17% 11.72% 69.89% 16.85% 86.74% 10.80% 97.54% 2.46%
2010 100% 17.88% 37.38% 59.07% 11.55% 70.62% 16.49% 87.11% 10.53% 97.64% 2.36%
2011 100% 16.14% 35.06% 56.49% 11.77% 68.26% 17.36% 85.62% 11.50% 97.11% 2.89%
2012 100% 18.60% 38.09% 58.95% 11.22% 70.17% 16.25% 86.42% 10.80% 97.22% 2.78%
2013 100% 18.48% 37.80% 58.55% 11.25% 69.80% 16.47% 86.27% 10.94% 97.22% 2.78%
2014 100% 19.85% 39.48% 59.97% 10.91% 70.88% 15.90% 86.78% 10.47% 97.25% 2.75%
Year Total Top 1% Top 5% Top 10% Top 25% Top 50%
Table 7. Dollar Cut-Off, 1980–2014 (Minimum AGI for Tax Returns to Fall into Various Percentiles; Thresholds Not Adjusted for Inflation)
1980 $80,580 $43,792 $35,070 $23,606 $12,936
1981 $85,428 $47,845 $38,283 $25,655 $14,000
1982 $89,388 $49,284 $39,676 $27,027 $14,539
1983 $93,512 $51,553 $41,222 $27,827 $15,044
1984 $100,889 $55,423 $43,956 $29,360 $15,998
1985 $108,134 $58,883 $46,322 $30,928 $16,688
1986 $118,818 $62,377 $48,656 $32,242 $17,302
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
1987 $139,289 $68,414 $52,921 $33,983 $17,768
1988 $157,136 $72,735 $55,437 $35,398 $18,367
1989 $163,869 $76,933 $58,263 $36,839 $18,993
1990 $167,421 $79,064 $60,287 $38,080 $19,767
1991 $170,139 $81,720 $61,944 $38,929 $20,097
1992 $181,904 $85,103 $64,457 $40,378 $20,803
1993 $185,715 $87,386 $66,077 $41,210 $21,179
1994 $195,726 $91,226 $68,753 $42,742 $21,802
1995 $209,406 $96,221 $72,094 $44,207 $22,344
1996 $227,546 $101,141 $74,986 $45,757 $23,174
1997 $250,736 $108,048 $79,212 $48,173 $24,393
1998 $269,496 $114,729 $83,220 $50,607 $25,491
1999 $293,415 $120,846 $87,682 $52,965 $26,415
2000 $313,469 $128,336 $92,144 $55,225 $27,682
The IRS changed methodology, so data above and below this line not strictly comparable
2001 $1,393,718 $306,635 $132,082 $96,151 $59,026 $31,418
2002 $1,245,352 $296,194 $130,750 $95,699 $59,066 $31,299
2003 $1,317,088 $305,939 $133,741 $97,470 $59,896 $31,447
2004 $1,617,918 $339,993 $140,758 $101,838 $62,794 $32,622
2005 $1,938,175 $379,261 $149,216 $106,864 $64,821 $33,484
2006 $2,124,625 $402,603 $157,390 $112,016 $67,291 $34,417
2007 $2,251,017 $426,439 $164,883 $116,396 $69,559 $35,541
2008 $1,867,652 $392,513 $163,512 $116,813 $69,813 $35,340
2009 $1,469,393 $351,968 $157,342 $114,181 $68,216 $34,156
2010 $1,634,386 $369,691 $161,579 $116,623 $69,126 $34,338
2011 $1,717,675 $388,905 $167,728 $120,136 $70,492 $34,823
2012 $2,161,175 $434,682 $175,817 $125,195 $73,354 $36,055
2013 $1,860,848 $428,713 $179,760 $127,695 $74,955 $36,841
2014 $2,136,762 $465,626 $188,996 $133,445 $77,714 $38,173
Source: Internal Revenue Service.
Year Total Top 0.1% Top 1% Top 5% Between 5% & 10% Top 10% Between 10% & 25% Top 25% Between 25% & 50% Top 50% Bottom 50%
Table 8. Average Tax Rate, 1980–2014 (Percent of AGI Paid in Income Taxes)
Source: Internal Revenue Service.