Trump’s tax plan to propose deep U.S. rate cuts, lacks revenue details
U.S. President Donald Trump will call on Wednesday for slashing tax rates on businesses and the wealthy as part of a new tax plan that is likely to offer few details about how to pay for the cuts without expanding the federal deficit. Hammered out over months of talks among Trump aides and top Republicans in Congress, the plan to be unveiled at an event in Indianapolis was expected to propose a 20 percent corporate income tax rate, a new 25 percent tax rate for pass-through businesses such as partnerships, and a reduced 35 percent top income tax rate for individual Americans. While it would lower the top individual rate from 39.6 percent, the plan was also expected to double the standard deduction, a set amount of income exempt from taxation, for all taxpayers. “You have to look at the plan in its entirety. It doubles the standard deduction, so in the end, even the lowest rates get a tax cut,” said Jim Renacci, a Republican on the tax-writing House of Representatives Ways and Means Committee. Republicans will say that the tax cuts, widely leaked to the media by a variety of sources in recent days, would be offset by new revenues raised from eliminating tax loopholes, although few if any of those are expected to be named in the plan.
UK retail sales growth climbs to two-year high: CBI says
British retail sales growth unexpectedly surged to a two-year high in early September, industry data showed, boosting the chances of a pick-up in the pace of economic growth and a Bank of England interest rate rise in November. The Confederation of British Industry’s retail sales balance jumped to +42 from -10 in August, the highest in two years and far above all forecasts in a Reuters poll of economists. British consumers have been squeezed by higher inflation caused in large part by the plunge in the pound after last year’s Brexit vote. The Bank of England said this month there were signs consumer demand might be picking up, helped by record-high employment, though it was too soon to tell if this would offset weak business investment. Sterling rose modestly against the U.S. dollar GBP= after the data and British government bond prices fell. “The robust CBI survey will likely fan belief that the Bank of England could very well raise interest rates … as soon as November,” said Howard Archer, chief economist for consultants EY Item Club. The figures suggested gross domestic product growth would pick up to 0.4 percent in the third quarter from 0.3 percent in the three months to June, he added.
China’s industrial profits jump most in four years on commodity price surge
Profits at China’s industrial companies rose the most in four years in August as commodities prices surged, thanks to a government-backed construction boom that is helping Beijing trim high levels of corporate debt without tripping up the economy. The upbeat earnings report is another sweetener for authorities as China focuses on stripping out financial risks from years of credit-fueled growth and keeping the economy on a steady footing ahead of a crucial party gathering next month. Profits in August jumped 24 percent year-on-year to 672 billion yuan ($101.21 billion), the National Bureau of Statistics (NBS) said on Wednesday. Discounting the combined Jan-Feb profit rise of 31.5 percent, the latest earnings boost would be the biggest single monthly percentage surge since August 2013. The statistics bureau does not release single-month figures for Jan-Feb due to seasonal factors. Annual profit growth was 16.5 percent in July. “The figures are really positive – they show China’s efforts to cut down on overcapacity is working well,” said Iris Pang, Greater China Economist at ING bank in Hong Kong. Crucially, Pang said that Beijing is also making headway in reducing debt risks. “When you close down overcapacity factories, you are also deleveraging to an extent.”