The Republican tax package is half way home. Yesterday, the House passed a tax overhaul, sending the package on to the Senate. The package passed is considered the most sweeping since Reagan, and would lower overall government tax revenue by $1.4 tn. However, the bill faces an uncertain future. Senate Republicans have an even more extreme iteration of the tax package, and there is already a serious pushback from not only Democrats, but Republicans too. This makes passage uncertain, and anything that does get passed by the Senate is likely to be sent back to the House.
FINSUM: It is very hardtop predict how this will play out. There have been many times this year where measures passed in the House only to die in the Senate.
Last week the Mueller probe formally charged two former Trump allies with money laundering and tax evasion, while also “flipping” a former Trump campaign aide. Now, there is a potentially more worrying connection coming to light: Secretary of Commerce Wilbur Ross failed to discuss financial connections to Putin’s inner circle earlier this year. Ross’ private equity firm does millions in business each year with a petrochemicals company that is close to the Kremlin. The Russian company’s owner is the husband of Vladimir’s Putin’s younger daughter.
FINSUM: Mueller is going to be all over this like a bloodhound. His tactic seems to be to flip the small fish to try to “tell” on the higher-ups. We are still very unsure if any of this will actually lead back to Trump, or all of this is just part of the deal when you hire successful international business people into key government positions.
Robert Mueller, leading a wide-ranging probe into the Trump campaign and its potential links to Russia, delivered a bombshell to the American political scene yesterday. Mueller’s team announced the indictment of Paul Manafort, Trump’s former campaign manager, and Richard Gates, his associate. They are being charged with counts related to tax evasion and money laundering. Additionally, Mueller announced the guilty plea of George Papadopoulos, Trump’s foreign policy adviser during the campaign. Papadopoulos admitted lying about the campaign’s connections to Russia.
FINSUM: Evidently there is a lot of buzz in legal circles about this, as it was surprising that Mueller could “flip” someone (Papadopoulos) without anyone finding out. The talk is that Mueller is aiming for the top with his strategy.
Hang on to your hats, the Mueller probe is about to launch its first criminal charges, and nobody knows to whom they will be directed. The first defendants are expected to be taken into custody today. The charges are also unknown, but on Friday Mueller obtained a grand jury indictment against at least one person. Trump put out several tweets yesterday calling the investigation a distraction.
FINSUM: Legal experts think this is just the first in a series of indictments, all of which will be designed to get defendants to speak out against other suspects. Hard to see where it will lead, but if this strategy is true it seems like Mueller plans on going after some big fish.
President Trump has largely been a one-man show so far in his presidency, allying with either party when necessary. However, his tactics have now sparked what Bloomberg is calling an “open rebellion” in the Republican party. Two top Republican senators, Jeff Flake of Arizona, and Bob Corker of Tennessee both open criticized Trump this week, saying he had caused a “degradation” of US politics, and that he was “debasing” the nation. Trump fired back on Twitter.
FINSUM: We think is a bit sensationalist. Yes, Trump received searing criticism—so what else is new?—but he also received it from two Senators who were announcing their retirement. It is hardly a rebellion if the rebels quit at the start.
In a very good sign for those hoping the government will pass a tax overhaul package, yesterday the Senate approved a new budget that is expected to pave the way for a tax overhaul. The measure passed 51 to 49, and now puts the onus on the Senate and House to work in unison to harmonize budget and tax plans. The budget approved by the Senate expects up to $1.5 tn in tax cuts. The chair of the Senate budget committee commented on the passage, saying “this budget resolution is the first step to pro-growth tax reform, as it will provide the fiscal headroom needed for the tax-writing committees in the Senate and the House to produce tax reform legislation”.
FINSUM: This is good news! This does seem to clear the way for a tax package, but as ever, the devil is in the details.