Trump’s ‘big announcement’ on tax to be broad principles: official

Posted by: Admin | Posted on: April 22nd, 2017 | 0 Comments

WASHINGTON President Donald Trump’s promised “big announcement” next week on overhauling the U.S. tax code, a top campaign pledge, will consist of “broad principles and priorities,” an administration official said on Saturday.

The president unexpectedly said on Friday at a Treasury Department event that there would be “a big announcement on Wednesday having to do with tax reform.”

In a Twitter message on Saturday, he wrote: “Big TAX REFORM AND TAX REDUCTION will be announced next Wednesday.”

Asked for details, the administration official, who asked not to be identified, said, “We will outline our broad principles and priorities” on Wednesday.

Trump has struggled as president to advance his domestic policy agenda, including on taxes, even though his Republican Party controls both chambers of Congress. With his 100th day in office only a week away, he has yet to offer any formal legislation or win passage of a major bill he favors.

Most recent presidents had legislative wins under their belts by this time in their administrations.

Under U.S. law, only Congress can make significant tax law changes, though the president often drives the tax agenda by offering legislation. The administration official said, “We are moving forward on comprehensive tax reform that cuts tax rates for individuals, simplifies our overly complicated system and creates jobs by making American businesses competitive.”

As a candidate, Trump raised high expectations in financial markets and the business community for changes in the complex, loophole-riddled tax system. In his “Contract with the American Voter,” he vowed to work with Congress on tax legislation “within the first 100 days of my administration.” The action plan promised large tax cuts for the middle class and businesses, a reduction of tax brackets to three from seven, simplified tax forms and an offshore profits repatriation tax holiday.

Since then, no legislation or formal tax plan has been presented by Trump. He has at times expressed support for a plan drawn up by House of Representatives Republicans, but his views are unclear on a section that deals with taxing imports.

In February, Trump promised a “phenomenal” tax plan within a few weeks, without offering details. No plan followed.

Last month when an attempt supported by Trump to repeal the healthcare law known as Obamacare collapsed in Congress, Trump said he would refocus on taxes.

Treasury Secretary Steven Mnuchin said on Thursday he expected Congress to approve a tax plan this year.

(Editing by Kevin Drawbaugh and Andrea Ricci)

Japan’s Aso pushes back on U.S. call for scrutiny of currency moves

Posted by: Admin | Posted on: April 22nd, 2017 | 0 Comments

WASHINGTON Japanese Finance Minister Taro Aso said on Saturday trade imbalances cannot be fixed through exchange-rate adjustments alone, pushing back against Washington’s calls to have more rigorous IMF scrutiny of currency moves.

Earlier, U.S. Treasury Secretary Steven Mnuchin called on the International Monetary Fund to enhance surveillance of its members’ exchange rates and external imbalances, as large trade imbalances would hamper “free and fair” trade.

But Aso told the IMF’s steering committee there were limits to using exchange-rate assessments to address current account imbalances for a country like Japan.

That is because the recent increases in Japan’s current account surplus are driven largely by rising dividend payments and repatriation of revenues from overseas investments, instead of any boost to exports from a weak yen.

“In cases where ‘excessive’ imbalances exist, they should be addressed by a package of macroeconomic and structural policy measures,” Aso said in a speech to the International Monetary and Financial Committee.

“Adjustment through changes in the exchange rate is not necessarily required,” he said.

U.S. President Donald Trump has criticized countries like Japan, Germany and China for running large trade surpluses with the United States and weakening their currencies to gain an unfair trade advantage.

Japanese policymakers fear the Trump administration may accuse the Bank of Japan of using ultra-loose monetary policy to weaken the yen and bind Tokyo’s hands on currency intervention to address any unwelcome spike in the yen.

“With downside risks and uncertainty persisting, the stability of financial and exchange rate markets is especially important,” Aso said.

“Excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability,” he added, referring to language in the G20 agreement that Tokyo cites as giving it room to intervene in the currency market to stem sharp yen gains.

(Reporting by Leika Kihara; Editing by Paul Simao)