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    Business Lobbyists Scramble to Kill $100 Billion ‘Revenge Tax’

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    Critics contend that the measure will scare off the foreign investment that President Trump wants to attract.Business lobbyists are working to kill a measure in the Republican tax policy legislation that would punish companies based in countries that try to collect new taxes from American firms.The push comes as Senate Republicans are preparing to unveil their domestic policy bill on Monday, which will ultimately need to be passed and merged with the legislation that the House passed last month. That bill imposes a so-called revenge tax on foreign companies that try to enforce the terms of a 2021 global minimum tax agreement or impose digital services taxes on American technology companies.The legislation would substantially increase the tax bills for many foreign companies that operate in the United States, raising more than $100 billion over a decade. Critics argue that the provision would chill foreign investment at a time when the Trump administration is trying to attract international money.“I think the president has been pretty unequivocal on where he stands on wanting more investment into the U.S. from international companies,” said Jonathan Samford, chief executive of the Global Business Alliance, which lobbies on behalf of international businesses in the U.S.Mr. Samford added that the measure “directly contradicts the president’s investment vision.”The legislation is poised to reignite international tax and trade wars that have been on hiatus as policymakers around the world grapple with how to overhaul the global tax system. It has also stoked anxiety among Wall Street investors and is expected to be a topic of discussion as leaders of the Group of 7 countries gather in Canada this week for a summit.Since taking office, President Trump has made clear that he wants nothing to do with a 2021 deal brokered by the Biden administration that aimed to rewrite the rules of how the world’s largest companies would be taxed around the globe. That deal, which was agreed to by the G7, created a new global minimum tax rate of at least 15 percent that companies would have to pay, regardless of their headquarter location. The aim was to prevent countries from lowering their tax rates as a way to attract multinational corporations, creating a “race to the bottom” in taxation that left nations with fiscal shortfalls.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Trump Officials Unveil Budget Cuts to Aid for Health, Housing and Research

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      The new blueprint shows that a vast array of education, health, housing and labor programs would be hit, including aid for college and cancer research.The Trump administration on Friday unveiled fuller details of its proposal to slash about $163 billion in federal spending next fiscal year, offering a more intricate glimpse into the vast array of education, health, housing and labor programs that would be hit by the deepest cuts.The many spending reductions throughout the roughly 1,220-page document and agency blueprints underscored President Trump’s desire to foster a vast transformation in Washington. His budget seeks to reduce the size of government and its reach into Americans lives, including services to the poor.The new proposal reaffirmed the president’s recommendation to set federal spending levels at their lowest in modern history, as the White House first sketched out in its initial submission to Congress transmitted in early May. But it offered new details about the ways in which Mr. Trump hoped to achieve the savings, and the many functions of government that could be affected as a result.The White House budget is not a matter of law. Ultimately, it is up to Congress to determine the budget, and in recent years it has routinely discarded many of the president’s proposals. Lawmakers are only starting to embark on the annual process, with government funding set to expire at the end of September.The updated budget reiterated the president’s pursuit of deep reductions for nearly every major federal agency, reserving its steepest cuts for foreign aid, medical research, tax enforcement and a slew of anti-poverty programs, including rental assistance. The White House restated its plan to seek a $33 billion cut at the Department of Housing and Urban Development, for example, and another $33 billion reduction at the Department of Health and Human Services.Targeting the Education Department, the president again put forward a roughly $12 billion cut, seeking to eliminate dozens of programs while unveiling new changes to Pell grants, which help low-income students pay for college.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Japan’s Debt, Now Twice the Size of Its Economy, Forces Hard Choices

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      Japan’s government faces pressure to curtail debt-fueled spending that some argue has staved off populist waves.Japan, which has the highest government debt among leading economies, is finding it difficult to spend like it used to.Debt-fueled public spending, enabled by low interest rates, has long been a way to address the country’s problems. Struggling farmers and emptying countrysides received generous payments from the central government. Relief aid during the Covid-19 pandemic morphed into new outlays for defense and subsidies to help consumers weather inflation.The spending continued even as more social security funding was needed for Japan’s growing number of seniors. Government debt has ballooned to nearly $9 trillion — more than double the size of the economy.Now, ahead of a heavily contested summer election, Japan’s ruling party is facing pressure to add even more debt. Small businesses hurting from U.S. tariffs are calling for government aid, and households squeezed by rising prices are demanding a rollback in taxes.But as the Bank of Japan moves away from the negative interest rates that for years made it easy for the government to borrow, the limits on spending are more stark.Recently, the market for Japanese government bonds has reflected concern about the country’s fiscal health. The yields on long-term bonds, an indication of investor confidence in the government’s ability to pay back its debts, rose to record highs at one point last week. And weaker-than-expected demand for an auction of 40-year bonds on Wednesday kept investors on edge.

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      Japan 30-year government bond yield
      Source: FactSetBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Tax Cuts Now Could Lead to Rising Rates Later. Here’s How to Protect Yourself.

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      The swelling budget deficit makes future tax increases likely, our columnist says, even if taxes are going down now. Hedge your bets with a concept from investing — diversification.Investors must deal with uncertainty every day. Without knowing what the markets will bring, they try to get good returns without bearing excessive risk.The classic solution is diversification — holding a broad array of global stocks and bonds. By spreading your risk, you obtain some protection against a disaster in any single holding. Even through the chaos in the markets brought about by President Trump’s on-again-off-again tariffs, well-diversified portfolios have been shielded from the wildest swings in the markets.This survival strategy makes sense in thinking about your taxes, too.Every taxpayer must deal with at least two kinds of uncertainty. First, you don’t know exactly what your income will be in the future. And far more irksome, you don’t know what the tax code will be next year, or over the next decade or two. That’s especially true now, because of the likelihood of a swelling budget deficit stemming from the Trump administration’s tax and budget policies.Consider the budget negotiations underway in Congress. Will they mean higher or lower taxes in the future? There are major disagreements and it’s not clear how they’ll turn out. Yet this much seems evident: There is little appetite in the White House or Congress for short-term tax increases. So you may conclude that your taxes will stay the same or even be lower, and plan accordingly.But not so fast. It’s easy to construct an argument suggesting that whatever happens this year, taxes must rise, and fairly quickly. After all, there are already signs that the bond market is reacting negatively to the prospect of ever widening federal budget deficits, which seem baked into every version of the Republican tax legislation now under consideration.The deficit may become so high in the years ahead, in fact, that the United States may not be able to finance all of its debt cheaply. Moody’s said as much earlier this month, when it downgraded the credit rating of the United States, warning that political dysfunction is imperiling the nation’s financial future. It’s easy to imagine a pushback by financial markets so powerful that tax rates will need to increase in the future — even if Congress reduces them for most people now.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Republican Revolt Reflects a Core Party Divide Over Spending and Debt

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      Whether the ultraconservatives dig in and force big changes to the megabill carrying President Trump’s agenda or capitulate, as they have in the past, will determine the fate of their party’s signature legislation.To a small but crucial group of hard-right House Republicans, the tax and spending cut package produced by their colleagues to deliver what President Trump calls the “big, beautiful bill” was nothing more than a homely cop-out.The handful of lawmakers who blocked their own party’s sprawling domestic policy measure from advancing out of a key committee on Friday acted out of a fundamentally different view of federal spending and debt than the rest of the G.O.P. They are single-mindedly focused on slashing deficits by restructuring the government to dramatically scale back social programs, whatever the political consequences.With their party in control of the House, Senate and White House, they view their fellow Republicans as timid, squandering a golden opportunity to turn the government’s finances around in a long overdue course correction. Instead, they see Republican leaders, catering to swing district members worried about their re-election, delivering a half-measure that, as far as the hard-liners are concerned, falls woefully short on cuts — and the ones it did make were gimmicky.“I’m not going to sit here and say that everything is hunky-dory,” Representative Chip Roy, Republican of Texas and one of the leading evangelists of deep spending cuts, said on Friday as he tore into his own party’s legislation. “This is the Budget Committee. We are supposed to do something to actually result in balanced budgets, but we’re not doing it.”It remains to be seen whether the anti-deficit fundamentalists are really dug in against the legislation or shopping for concessions that could allow them to claim a partial victory against deficit spending and still ultimately fall in line behind Mr. Trump. They have earned a reputation both for revolting against their own party at crucial moments and for backing down before their intransigence actually kills a top Republican priority — often without achieving what they initially demanded.But for a few days at least, the recalcitrance of Mr. Roy and his fellow deficit hawks, and their willingness to challenge a majority of their own party, has tied down the entire Republican legislative agenda.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Republican Tax Bill May Hurt the Lowest Earners and Help the Richest

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      Even though most Americans may see lower taxes, Republicans’ spending cuts could outweigh those benefits and leave some worse off.As Representative Jason Smith commenced a marathon session this week to consider a sprawling and expensive Republican tax package, he took special care to emphasize his party’s commitment to “hard-working Americans.”“Pro-growth tax policy will shift our economy toward one that serves them, not the wealthy and well-connected,” Mr. Smith, the Missouri lawmaker who leads the House’s top tax panel, proclaimed.But the proposal he is trying to get to President Trump’s desk ultimately tells a more complicated story. The Republican tax plan may offer only modest gains to everyday workers, according to a wide range of tax experts, and some taxpayers may actually be left in worse financial shape if the bill becomes law.The latest assessment arrived Friday from the Penn Wharton Budget Model, a nonpartisan scorekeeper closely watched on Capitol Hill. Economists found that many Americans who make less than $51,000 a year would see their after-tax income fall as a result of the Republican proposal beginning in 2026.The Penn Wharton estimate sought to analyze the full scope of the Republican tax package, computing the effects of the tax cuts as well as the plan to pay for them by slashing federal spending on other programs, including Medicaid and food stamps. Combined, those policies could fall disproportionately on the poorest, including those near or below the poverty line, the economists found.People making between about $51,000 and $17,000 could lose about $700 on average in after-tax income beginning in 2026, according to the analysis, when factoring in both wages and federal aid. That reduction would worsen over the next eight years. People reporting less than $17,000 in income would see a reduction closer to $1,000, on average, also increasing over time, a shortfall that underscores their reliance on federal benefits.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      In Trump Tax Package, Republicans Target SNAP Food Program

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      Limiting funding for SNAP could help defray the costs of President Trump’s tax plans, but could result in millions of low-income families losing access to aid. House Republicans on Monday proposed a series of sharp restrictions on the federal anti-hunger program known as food stamps, seeking to limit its funding and benefits as part of a sprawling package to advance President Trump’s tax cuts.The proposal, included in a draft measure to be considered by the House Agriculture Committee this week, would require states to supply some of the funding for food stamps while forcing more of its beneficiaries to obtain employment in exchange for federal aid. The moves could result in potentially millions of low-income families losing access to the safety net program. But G.O.P. leaders insist that their approach would improve the provision of food stamp benefits while helping to defray the cost of Mr. Trump’s expensive legislative ambitions.House Republicans said in a statement on Monday that their proposal emphasized “reinforcing work, rooting out waste, and instituting long-overdue accountability incentives to control costs and end executive and state overreach.”The Republican overhaul specifically targets the Supplemental Nutrition Assistance Program, known as SNAP With a roughly $110 billion annual budget, it is the federal government’s largest nutrition assistance initiative, providing monthly allotments to an average of 42 million people in the 2025 fiscal year, according to the most recent data from the U.S. Department of Agriculture, which manages the program.Proponents of the food stamp program say that it has long served as a critical lifeline for low-income families by ensuring that they do not experience hunger in a nation where about one in seven reported food insecurity at some point during 2023, according to federal data released in September.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Republican Agenda Hits Familiar Obstacle: State and Local Taxes

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      A small group of Republicans are threatening to torpedo President Trump’s agenda over the state and local tax deduction, long a headache for both parties.It was perhaps inevitable that the Republican effort to pass a vast fiscal package this year would, at some point, get caught up in the thicket of the state and local tax deduction.After all, the deduction, often called SALT, has long had the potential to cause a political standoff. Many G.O.P. lawmakers abhor it and, in 2017, imposed a $10,000 limit on the amount of state and local taxes Americans can write off on their federal returns. But to pass a tax bill this year, the party will need the support of a motivated clutch of Republicans who have made lifting that cap the animating promise of their political careers.Those lawmakers, who represent high-tax states like New York and New Jersey where the deduction is cherished, say they are willing to tank the package over the issue. Representative Nick LaLota, Republican of New York, can already visualize voting against the bill.“There’s a green ‘yes’ button and there’s a red ‘no’ button to press. Come time, if there’s not enough SALT in this bill, I’m pressing the red ‘no’ button,” he said. “It is a hill I am willing to stake my entire congressional career on.”Attempts by House Republican leaders to reach a deal with members like Mr. LaLota yielded little progress this week, leaving the issue unresolved as G.O.P. lawmakers prepare to release the first draft of their tax bill next week. Along with Medicaid, the health care program for the poor that Republicans have targeted for cuts, the state and local tax deduction could determine the fate of the entire G.O.P. legislative agenda.That’s because any change to the current $10,000 limit would be incredibly expensive, threatening to swamp the overall Republican budget for tax cuts. Even a relatively modest change, like doubling the cap for married couples, would cost $230 billion over a decade, according to the Committee for a Responsible Federal Budget. More generous alterations along the lines of what New York Republicans have demanded could surpass $1 trillion.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Trump Softens on Raising Taxes on the Rich, Saying G.O.P. Probably Shouldn’t

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      Days after he privately encouraged Speaker Mike Johnson to increase tax for the wealthy in a bill to fulfill his agenda, he publicly said it could be a bad idea, one that was ‘OK’ with him.President Trump on Friday publicly softened his private push on House Republicans to raise taxes on wealthy people and scrap a tax break that benefits private equity executives as part of a megabill to carry out his agenda.“The problem with even a ‘TINY’ tax increase for the RICH, which I and all others would graciously accept in order to help the lower and middle income workers, is that the Radical Left Democrat Lunatics would go around screaming, ‘Read my lips,’ the fabled Quote by George Bush the Elder that is said to have cost him the Election,” Mr. Trump wrote on his social media website, Truth Social. “Republicans should probably not do it, but I’m OK if they do!!!”Mr. Trump on Wednesday had privately urged Speaker Mike Johnson to create a higher tax bracket for those making more than $2.5 million a year. He also said he supported closing what is known as the carried interest loophole, which allows hedge fund, private equity and venture capital executives to pay taxes of only about 20 percent on their profits, which is about half the top income tax rate.The request further complicated Republicans’ job as they toil to put together a domestic policy bill they hope to push through Congress this year. Divisions within the party over potential cuts to Medicaid and other popular social programs to pay for it, and which tax reductions to include, have delayed the drafting of the package and threaten to sap support for it. And Mr. Trump’s abrupt and sometimes fleeting demands for the bill have hung over the talks, with G.O.P. lawmakers reluctant to cross him but uncertain of where he will ultimately stand.Mr. Trump is not constitutionally eligible to run for another election, unlike President George H.W. Bush, who was famously accused of breaking his campaign pledge not to impose new taxes.But Republicans are already facing blowback over Mr. Trump’s first four months in office, well ahead of the midterm congressional elections. And many do not want to take a vote that would be used by Democrats as a weapon against them.Mr. Trump did not entirely walk away from his tax demand in the social media post. But he left himself an out should Republicans balk. More