Tag Archives: Hunt for Taxes

Apr 27 2017

Citing New Soft Wood Import Tariff, Maine Lumber Mill to Add Jobs and Second Shift…


Re-Posted from the Conservative Tree House  on April 26, 2017 by

President Trump has a simple economic platform: “Buy American and Hire American“; toward that goal all economic and fiscal policies are now directed to assist U.S. manufacturing companies and retain U.S. workers.  Period.

Two days ago Commerce Secretary Wilbur “Wilburine” Ross announced a 20% tariff, countervailing duties, on imported Canadian soft wood lumber.  Today, Pleasant River Lumber Co. in Jackman Maine announces their wood mills will now expand as a direct result of the beneficial impacts of even trade practices.

This is a big deal for this community.

MAINE – The Dover-Foxcroft-based Pleasant River Lumber company is expanding its Jackman sawmill in anticipation of increased demand for American lumber amid the U.S. government’s plans to levy tariffs on Canadian softwood.

In a media release Tuesday, Pleasant River Lumber said it is expanding its Moose River spruce mill in Jackman to add drying capacity this summer and hire up to 20 new workers for a second shift starting this fall.

“We have confidence with the recent tariff announcement a level playing field will exist that will allow us to invest in and expand our facilities in Maine,” said Jason Brochu, co-president of the family-owned Pleasant River Lumber.

The company employs 300 workers at its spruce and pine sawmills in Dover-Foxcroft, Jackman, Hancock and Sanford. The company acquired the Moose River Mill in Jackman in 2015, and it now produces about 85 million board feet of dimensional lumber a year.  (read more)

Some people might think this is not that big a deal in the grand scheme of things.  However, it is a very big deal to that community; it is a very big deal to those families; it is a very big deal to those who will now have good paying jobs.

Once upon a time, there was an old man who used to go to the ocean to do his writing. He had a habit of walking on the beach every morning before he began his work. Early one morning, he was walking along the shore after a big storm had passed and found the vast beach littered with starfish as far as the eye could see, stretching in both directions.

Off in the distance, the old man noticed a small boy approaching.  As the boy walked, he paused every so often and as he grew closer, the man could see that he was occasionally bending down to pick up an object and throw it into the sea.  The boy came closer still and the man called out, “Good morning!  May I ask what it is that you are doing?”

The young boy paused, looked up, and replied “Throwing starfish into the ocean. The tide has washed them up onto the beach and they can’t return to the sea by themselves,” the youth replied. “When the sun gets high, they will die, unless I throw them back into the water.”

The old man replied, “But there must be tens of thousands of starfish on this beach. I’m afraid you won’t really be able to make much of a difference.”

The boy bent down, picked up yet another starfish and threw it as far as he could into the ocean. Then he turned, smiled and said, “It made a difference to that one!”

[SOURCE]

Apr 27 2017

Italy to Raise Taxes to Satisfy Brussels – Why the Euro Will Fail


Armstrong Economics Blog/Italy

Posted Apr 27, 2017 by Martin Armstrong

Gentiloni Paolo

 

ItalyThe European Union (EU) has been pushing Italy for a very long time to reduce its deficit. Of course, governments are never capable of reducing their own expenditure. This results going in only one direction – raising taxes. Prime Minister Paolo Gentiloni had to agree on the concrete measures. The bill is now being discussed in Parliament, which has 60 days to pass. Italy has the second highest debt in the Eurozone after Greece.

This is why the EU is doomed. There will never be any reform that addresses the people. It is always about raising taxes to maintain government power and to hell with the people. The upcoming Germany vote still appears to be fragmented and as a result, Merkel may remain as Chancellor at the end of the day. We will have to run our models soon on the German election.

This is why I have warned that the Euro will fail. Had Brussels consolidated all the debts from the outset, then the Euro would have competed against the dollar. Leaving everyone to hold their own debts only created a single currency and then the fear that if one member expended their debt, it would impact everyone else.

This system is tearing Europe apart and unemployment in each country will turn to civil unrest and point the finger at Brussels. The debts should have been consolidated and the central bank would have then had a single bond issue for reserves. Now, the entire banking system has to be politically correct, owning a piece of everyone. Even the ECB has 40% of all government debt throughout the Eurozone.

It is beyond brain-dead to maintain this system demanding individual countries sacrifice their own domestic policy objectives for Brussels’ demands. In the USA, each state has its own agenda, but their debt is not acceptable as reserves for the banks. The Euro system is simply like being somehow half-pregnant.

Apr 27 2017

The Gold Reports & the Building of Volatility the Precursor to Chaos


Armstrong Economics Blog/Gold

Re-Posted Apr 27, 2017 by Martin Armstrong

Volatility Historical

Our first report will be released on Gold, Guns & War which illustrates how gold has historically reacted to different types of war events, both internationally as well as domestically, as in civil unrest and revolution.  Illustrated here, we can see the historical volatility in gold over decades of interacting with the global economy and war. This chart shows how volatile the instrument is now in relation to a historical all time correlation.

We are witnessing the gradual rise in volatility since the 1999 lows. We are still nowhere near the sharp rise in volatility sparked by the collapse of Bretton Woods. Nevertheless, the timing is setting up on our volatility models for the future. Everything is lining up and we will be reviewing this at the Hong Kong WEC at the end of the month.

Apr 27 2017

Trump Keeps His Pledge on Tax Reform


Armstrong Economics Blog/The Hunt for Taxes

Re-Posted Apr 27, 2017 by Martin Armstrong

trump-cohen

TAX-REF (3)A lot of emails are coming in asking if I have been advising Trump on the taxes since this is similar to the plan I proposed when I testified before Congress. The answer is no. If they took the tax proposals we had worked on with members of Congress back in the Nineties, who knows. They are on file and have been endorsed by many different tax reform advocates.

I have not spoken with anyone in the White House regarding taxes. I testified why the corporate tax rate must be cut to 15% before the House Ways & Means Committee. The answer is very simple. Corporations will be taxed in their home country unless they pay some tax where they are domiciled overseas. Our headquarters back then was in Hong Kong. Everyone was there because of a 15% corporate tax rate. I testified if the USA lowered the corporate tax rate to 15%, then the USA would become the tax-haven and corporations would move to the States. This is a no brainer and was based on the fact that we did in fact advise multinational corporations – not just theory. I knew what they would do and would have advised them to move accordingly.

tax-cycThe biggest problem we face is this has to be made into a Constitutional Amendment. This is my ADVICE to Trump right now! Why, as soon as the cycle changes and the Democrats gain control, the taxes will rise again. This is why corporations level. We LACK TAX STABILITY. Taxes become a yo-yo  and business cannot plan long-term when the political atmosphere keeps changing between Marxism and a Free Market. This eternal battle destroys economic growth and has ruined jobs only to reduce the standard of living for the long run. A chart of the top tax brackets look like the brainwave of a schizophrenic.

Trump’s tax plan reduces seven tax brackets down to three. So it’s not the Flat Tax that Democrats will slam because the rich will keep more than they average person based solely on Marxism that discriminates freely against someone based upon their income. The first tax cut was JFK, the second was Reagan. This will be the biggest tax reform in US history. It does not go far enough, but it is the best we can do until there is a collapse in the monetary system that ends Marxism once and for all.

White House chief economic advisor Gary Cohn and Treasury Secretary Steven Mnuchin effectively summarized the plan to reporters. It reflects the proposal Trump outlined as a candidate keeping his word to his supporters. That in itself is really unusual for any candidate to do what they said during the election.

The tax rate on repatriation of trillions of dollars offshore is still being argued with Democrats, who never saw a $1 they did not want at least 50% of. The Death Tax has been devastating to small business and farmers. The next generation have been compelled to sell land, the farm or close the business to pay the estate taxes. This has wiped out small farms and resulted in big corporate America producing food as small farmers were forced to sell because of taxes. Likewise, if a small business sees its owner die, the family has been forced to shut it down. This was one primary reason I have been saying we will go public or else if I died, the taxes owed for my death would result in job losses for staff. Going public was the only way to get around this to ensure the company continues. So these changes will be beneficial for the economy and this may be one of the reasons why the stock market still looks like it will double in value into the years ahead after we get past 2017 this year from Political Hell.

  • Trump’s plan will cut the number of income tax brackets from seven to three, with a top rate of 35 percent and lower rates of 25 percent and 10 percent. It is not clear what income ranges will fall under those brackets. It would also double the standard deduction.
  • The proposal will chop the corporate tax rate to 15 percent from 35 percent.
  • It would eliminate tax deductions with only a few exceptions, including the mortgage interest and charitable contribution deductions.
  • The White House said there will be a “one-time tax” on the trillions of dollars held by corporations overseas. However, Mnuchin said the rate for that tax has yet to be determined. Mnuchin said the White House is “working with the House and Senate” on a repatriation rate, saying it would be “very competitive.”
  • The plan would get rid of the estate tax, otherwise known as the “death tax.” Cohn said that the move will help privately-held businesses and American farmers. Analysis of the estate tax reveals that it affects only a very small portion of Americans.
  • Mnuchin also said the U.S. would go to a “territorial” tax system. Though further details were not forthcoming, such systems typically exclude most or all of the income that businesses earn overseas.
  • Trump’s plan would also repeal the alternative minimum tax and 3.8 percent Obamacare taxes.
Apr 26 2017

More Visible Dots The Media Ignore In Trump’s Strategy Against North Korea…


Re-Posted from the Conservative Tree House on April 26, 2017 by

Hours before the Trump administration briefed 100 senators today on the issues surrounding North Korea, a more consequential announcement was made.

The jaw dropping announcement (hidden by U.S. media) appears to show just how long President Trump has been putting the North Korea strategy together.  However, before discussing that aspect, we review the Senate Briefing at the White House:

Today Defense Secretary Jim Mattis, Secretary of State Rex Tillerson, Director of National Intelligence Dan Coats and Gen. Joseph Dunford, chairman of the Joint Chiefs of Staff, presided over a meeting meeting to brief Senators.

The details of that meeting have not been made public because of their classification and sensitivity.  The meeting lasted about one hour and discussed various financial and military options available for pressuring North Korea to end its nuclear program. (link)

Here’s where it gets really interesting.

For months the media have, at random, ridiculed President Trump for not distancing himself from Philippine President Rodrigo Duterte.  President Duterte has been cracking down on Filipino drug gangs in his country and his approach has been severe and extremely tough.  Indeed Duterte’s zero tolerance approach has been brutal.

However, shortly after his election, December 3rd 2016, President Trump chose not to refute Duterte for his approach toward confronting the Filipino drug gangs and drug epidemic.  The media were apoplectic.   Duterte responded by calling President Trump “a deep thinker“. Duterte said he was greatly pleased with the “rapport” he has established with the newly elected U.S. president.

Instead of President Trump calling out President Duterte for the severity of his approach, President Trump moderated any criticism and said he understood that Duterte was confronting the problem the best way he knew how for his country.

That was in December of 2016.

Well, guess who is now the rotating (every year) Chairman of the Association of South East Asian Nations (ASEAN)?

Yup, Philippine President Rodrigo Duterte.

And just yesterday, after a visit last week from Vice-President Pence, ASEAN announced:

Southeast Asian nations would adopt a softer than usual tone about South China Sea disputes at a leaders’ summit on Saturday in Manila, and exclude references to militarization or island-building, according to a draft of the chairman’s statement.

Although some Association of South East Asian Nations (ASEAN) leaders will express “serious concern” over the “escalation of activities” in the disputed sea, ASEAN will drop references, or even allusions, to China’s construction of artificial islands and the military hardware it has placed on them, according excerpts of the draft seen by Reuters. (link)

China has been expanding its seven man-made islands in the Spratlys (South China Sea) for several years, and the action has been a considerable point of angst for the region and for U.S. geo-political strategists in the former Obama administration.

However, despite the activity, and despite the protestations by the Obama White House and Obama State Department, the general consensus has been there’s nothing any nation can do about it because China exerts tremendous economic leverage in the entire region.  Additionally, the man-made Islands are too far along for any substantive international efforts to thwart them. 

The horse giant panda is now fully out of the barn.

There’s no President Trump policy capable of reversing the position of China in this action.  Done is done.  However, the international view of legitimacy around these islands still carries some major political leverage if applied toward a greater regional need of similar consequence.

Enter the need for the international community, and ASEAN specifically, to see North Korea pull-back from their doomsday nuclear ambitions…. and President Trump understanding that given the nature of entire issue – it all comes down to leveraging China, using complex terms of political currency, valuation and international legitimacy, against North Korea.

The Giant Panda can eliminate the problem that is Kim Jong Un.

ASEAN Chairman, Philippine President Rodrigo Duterte, modifying the confrontational tone of Asian nations toward China is yet another useful carrot by U.S. President Trump to stimulate China’s increased pressure upon North Korea.

That’s a really big ‘get’ for President Xi Jinping.

“Complicated business folks, ….Complicated business”…  

Again, a review of the activity timeline reveals a long-term strategic approach: 

♦February 10th – President Trump hosted Japanese Prime Minister Abe at the White House and at Mar-a-Lago, w/both spouses, to discuss regional issues (including N-Korea).

♦February 27th – President Trump and Chinese State Councilor Yang Jiechi meet in the White House Oval Office to discuss regional issues (including N-Korea).

♦March 15th – Secretary of State Rex Tillerson visits Japan, South Korea and China to follow up on February’s conversations and discuss the forward path (including N-Korea).

♦April 6th and 7th – President Trump hosts Chinese President Xi Jinping in Mar-a-Lago where they discussed all of the critical bilateral and regional issues (including N-Korea).  President Trump seeded the background by appointing Ambassador Terry Branstad, a 30-year personal friend of President Xi Jinping.

♦April 8th – Secretary Rex Tillerson debriefs the media.  <– CRITICAL READ

WHAT HAPPENED NEXT?

  • For the first time ever, China did not support Russia in a U.N. Security Council veto vote surrounding Syria.   China abstained.
  • China turned around 12 fully loaded cargo ships laden with imported coal from North Korea.  400,000 metric tonnes refused unloading.   China begins an embargo against North Korean coal.  China begins importing coking coal for steel-making from the U.S. coal mines.
  • Additionally, in furtherance of economic sanctions – China halts oil exports to North Korea.
  • Additionally, in furtherance of political isolation – China halts direct flights between Beijing, China and Pyongyang, North Korea.
  • And in the most stunning seismic shift of geo-political alliances, China says it is now open to discussions of a denuclearized North Korea, meaning getting rid of N-Korean nukes, WITHOUT N-Korea being included in the talks. Hello?  China, the United States, Japan, Russia and South Korea discussing how to de-nuke North Korea.  (A new Marshal Plan of sorts)

♦April 14th – President Trump announces policy directive to Treasury Secretary Mnuchin that there’s no need to label China as a currency manipulator.

♦April 15th – Vice President Pence arrived in Asia for a ten day visit (South Korea, Japan, China, Indonesia, Australia); positioned as the steady, stable and reliable administration policy closer (including N-Korea).

♦April 23rd – President Trump followed up on Pence’s visit with personal phone calls to China’s President Xi Jinping and Japanese Prime Minister Shinzo Abe; again, the topic was North Korea.

♦April 24th – U.N. Ambassador Nikki Haley brings the U.N. Security Council to the White House for lunch with President Trump.  The President spoke of the need for the U.N. to fulfill its original charter.

♦April 25th – ASEAN (Philippine President Rodrigo Duterte – rotating ASEAN Chairman) releases policy statement saying Southeast Asian nations agree to go easy on Beijing over South China Sea dispute.

Although some Association of South East Asian Nations (ASEAN) leaders will express “serious concern” over the “escalation of activities” in the disputed sea, ASEAN will drop references, or even allusions, to China’s construction of artificial islands and the military hardware it has placed on them, according excerpts of the draft seen by Reuters.

♦April 26th – President Trump invites all U.S. Senators to the White House for a classified briefing on North Korea.

♦April 28th – (THIS FRIDAY) U.S. Secretary of State Rex Tillerson will be traveling to the U.N. to speak to the Security Council personally.

Apr 26 2017

Commerce Secretary Wilbur Ross Talks To Lou Dobbs….


Re-Posted from the Conservative Tree House on April 25, 2017 by

Ah, the simple joys in life.  Wilburine Ross interviewed by Lou Dobbs… Sip slowly.

The general status of angst created by ordinary swamp review has a tendency to wear down a soul. It’s at the times when we feel surrounded we should reflect upon how lucky we are to have the T’Rex’s and Wilburines on our team. We’ve already won, our opponents just haven’t noticed yet.

Apr 26 2017

White House Responds to Judge Orrick Defunding “Sanctuary City” Injunction…


Re-Posted from the Conservative Tree House on April 26, 2017 by

Apr 26 2017

Does Schäuble want Draghi to Exit the Stage Once & For All?


Armstrong Economics Blog/European Union

Re-Posted Apr 26, 2017 by Martin Armstrong

Draghi Schauble

Federal Minister of Finance Wolfgang Schäuble of Germany is starting to show signs of rebellion against the elite in Brussels. With the event of BREXIT, the EU is more concerned about trying to punish Britain than they are in reflecting upon what is going so terribly wrong. They will throw their support behind Macron in France fearing that a Le Pen win may be the end of Brussels. Consequently, the EU Commission is trying to punish Britain, and is actually dividing Europe once again. There will be the EU membership, and then there will be the Eurozone within, limited to those countries who surrender their sovereignty to Brussels relinquishing their currency, but not their debt.

Schäuble is clearly attempting to save the Eurozone and make it operational at the same time to protect German exports within Europe. The driving force behind the Euro was to eliminate foreign exchange risk so German manufacturers could sell to all of Europe on a regular basis without currency fluctuation disturbing their sales.

Yet Schäuble is actually looking at reducing the power of the EU for reading between the lines, he has no confidence in the abilities of the EU Commission to manage Europe. Obviously, BREXIT is restructuring the EU only insofar as they seek to punish Britain rather than reform the problems that caused it. That means the Euro zone will be restructured as a block within the EU leaving the institutions, such as the ECB, applicable to the EU. The rules within the Eurozone are by no means clearly defined. This is how Markel opened the gates to refugees without ever going to a vote first in the EU. Thus, the unilateral decisions of Germany have then been applied to all of Europe without any democratic process whatsoever.

Schäuble is looking at the distinction between the EU and the Eurozone and thus reducing the power of the EU Commission to save the Eurozone – a second Europe within Europe, of which Britain was never a member. Schäuble attacked the ECB and Mario Draghi saying: “The ultralock money policy that exists in many regions is not helpful.”  Schäuble said this opening on his trip to Washington. The ECB, Schäuble argues, is creating risks such as asset price bubbles with its negative interest rate policy. This is the clash of philosophies with Schäuble’s view on AUSTERITY.

Schäuble demanded a change of direction from Mario Draghi. He warned that Draghi was increasing the risk of creating a whole new crisis rather than lessening it. The Federal Reserve reverse course right after 2015.75 on the ECM that targeted October 1st, 2015 with the first rate hike in December 2015. Schäuble remarked that it “would not be a bad idea if the European Central Bank and other central banks followed” the course of the Fed. Schäuble has clashed with Draghi who still considers his stimulus quantitative easing policy of the ECB still necessary. Draghi said on this trip to Washington that a “very significant amount of monetary easing is still needed.”

Schäuble has also proposed that the basic structure of the Eurozone in the form of budgetary policy must be changed. Schäuble remains rightly concerned what happens when Draghi changes course and raises rates. Schäuble is deeply concerned that national debts will then explode with higher interest rates. For this reason, Schäuble wants the euro rescue umbrella ESM in the near future converted to a European Monetary Fund. Schäuble sees this as a European version of the International Monetary Fund (IMF). If a new aid program for a crisis country were to run without the IMF because the IMF has disagreed with the draconian measures imposed upon Greece. Schäuble wants to replace the IMF to impose austerity. Apparently, Schäuble has also convinced Chancellor Angela Merkel of this proposal since the IMF disagrees with the austerity ideas of Schäuble.

Troika-Unelected

This new European Monetary Fund to replace the IMF, which is a member of the Troika, will then be given the task of budgetary monitoring of Eurozone countries. Therefore, we will have the EU, but a separate system within the EU for the Eurozone all based upon extending austerity. This is obviously a disempowerment of the EU Commission.

Greece is still an unsolved problem – and Schäuble also sees that Greece should exit the Eurozone. Schäuble also sees a better partnership with Russia and an emancipation from the USA. This was really based upon German manufacture having a new market to sell into given the rise of Donald Trump. Then Schäuble wanted a nuclear Europe to stand against America and Russia. Schäuble’s view is that the core of Europe is Germany, France, Belgium, Luxembourg and the Netherlands. It never included Britain. The Franco-German axis was to become the economic engine of the future. To Schäuble, the core is simply the Euro for that evens the playing field for Germany to sell products into Europe. He has embraced the Euro, but never accepting a federal debt for Europe. This is why he has never seen Italy, Spain or Greece as the core of the EU – just vassal states to sell products to.

Apr 26 2017

London Property Sales Crashed 40% Thanks to Tax Increase


Armstrong Economics Blog/BRITAIN

Re-Posted Apr 26, 2017 by Martin Armstrong

62 Cornall Gardens

Where I use to live back in 1985

George Osborne budgetThe London housing market sales has crashed to its lowest level now since 2013. We reported in November 2015 with the turn in the ECM on 2015.75 that the London property market peaked. Valued crashed by 11.5% in the first month after the turn of the ECM. Landlords are joining together to challenge the Conservative’s (i.e. Tory’s) tax hike by filing a suit in the high court against their tax increase on “buy-to-let” investment properties.  In July 2015, we warned that the Conservatives were going after the non-domiciled residents in London and that would stop the real estate boom.

The figures are now out and they show that the number of homes bought over the last year crashed by 40% between March 2017 and March 2016, from 173,860 to 102,810. “That was thanks to new stamp duty rules introduced at the beginning of last April, which hiked stamp duty on second homes and led to a buying frenzy just before the rules were introduced,” reported Emma Haslett.

Keep in mind that we are only human. Consequently, if you see municipal taxes rising in the USA, expect property values to also decline. It is the same worldwide.

Apr 26 2017

Le Pen Seeks to Broaden Her Support


Armstrong Economics Blog/France

Re-Posted Apr 26, 2017 by Martin Armstrong

2017 Election

French Presidential candidate Marine Le Pen says she is temporarily stepping down as head of her National Front party. She is still in the race, just attempting to distance herself a bit more from her party to broaden her appeal. The May 7 run-off between herself and Emmanuel Macron, will be interesting for it is a test of how strong the populist movement has become.

People who think “populist” is a particular philosophy are seriously wrong. It was a “populist” movement that put FDR in the White House in 1933. It also put into power Lenin, Hitler and Mao. “Populist” is effective the label applied to any movement Indeed, FDR actually did embrace many elements of fascism, which differs from communism insofar as it supported worker unions and the ownership of business run by the workers. The Populist movement was in fact Marxism during the late 19th century, which manifested into Communism, fascism, and socialism. All three were constructed upon a strong central power of government to different degrees.

“Populist Movements are not particularly a single right or left philosophy. The term is applied to effectively an anti-establishment movement against the status quo.

Le Pen said “Tonight, I am no longer the president of the National Front. I am the presidential candidate,” on French public television news. She hopes that by distancing herself from the party founded by her father in 1972, more people will reach out to her for real change in France. Le Pen hopes to tap into the Eurosceptic and protectionist voters in other parties. The underling trend is certainly anti-EU throughout all of Europe to varying degrees.

Macron is the favorite of Brussels and all the politicians nobody wants to vote for, so what does that really tell you? All the politicians are cheering only because they do not want any real change. They like everything as is – thank you very much they say off camera. But Macron is really out there in la la land. Those who think Trump says some crazy stuff, should turn and look at Macron. How about these!

“I’ve always accepted the vertical dimension, of transcendence, but, at the same time, it has to be utterly anchored in the immanent, in the material.”

Ok, not sure what that means at all. How about this one!

“We all have our roots. And because we all do, there are trees next to us, there are rivers, there are fish. There are brothers and sisters …”

Ok roots and trees go together. What about the rivers and fish? Brothers and sisters is family. Does everyone come from fish out of the river?

If he will be the new face of France, I would probably want to double short the Euro when the cycle changes.