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US Politics: GOP Eyes Tax Overhaul — And Lessons From Health-Care Failure

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Evaluation of Public Accountability and Tax Culture among Tax Payers in Nigeria
  • GOP Eyes Tax Overhaul — And Lessons From Health-Care Failure

Moments after their hopes of undoing Obamacare unraveled, President Donald Trump and top Republicans said in unison that they’re moving on to another ambitious goal — overhauling the U.S. tax code.

“We will probably start going very, very strongly for the big tax cuts and tax reform,” Trump said to reporters Friday after the House bill was pulled from a scheduled floor vote. “That will be next.”

House Speaker Paul Ryan told reporters that Republicans will proceed with tax legislation — and said he met with Trump and Treasury Secretary Steven Mnuchin earlier on Friday to discuss taxes. Ryan sounded a note of caution: The health bill’s failure “does make tax reform more difficult,” he said, “but it doesn’t in any way make it impossible.”

Even before the health bill was withdrawn, two of the Trump administration’s top economic officials were shifting the conversation toward taxes. Mnuchin and White House Budget Director Mick Mulvaney both said Friday that the White House is at work on a plan for both individual and corporate tax changes that’s coming soon.

Still, Ryan’s frank assessment of his party’s missed opportunity on health care Friday afternoon might just as well apply to tax legislation. “Doing big things is hard,” the speaker told reporters.

Governing Test

That sentiment reflected the mood of some anxious and frustrated Republicans, who were unable to muster enough votes in their first major test of governing in the Trump era. Several lawmakers said a complete overhaul of the tax code — which hasn’t been done in more than 30 years — would be tougher in the wake of the American Health Care Act’s defeat, as might the rest of their agenda.

“We have to learn that we’re not just the party of no,” said Representative Steve Womack of Arkansas, a member of the House GOP’s whip team. “We have to learn how to govern.”

This month, Trump, a billionaire businessman who touted his expertise on tax-avoidance strategies during his campaign, had at times seemed wistful about letting tax issues take a back seat to health policy. On Monday, during a campaign-style rally in Louisville, he told the crowd: “We want a very big tax cut, but cannot do that until we keep our promise to repeal and replace the disaster known as Obamacare.”

Now, he and fellow Republicans will face heightened political pressure to deliver on taxes, and the president’s tactics may have to evolve, lawmakers said.

Presidential Lesson

“My guess is he has learned through this process that politics is different from business,” said Representative Bill Huizenga, a Michigan Republican, on Friday afternoon. Lawmakers answer to their constituents, not the president, he said. “There’s no ability to sit at a table and say ‘You’re fired.’”

One difference that’s already apparent: Lawmakers and administration officials seem inclined to take more time on tax legislation. The health-care bill was introduced, marked up, passed through committees and scheduled for a floor vote in just a few weeks. On taxes, House leaders have said they hope to pass a bill by August. Top Republican senators say it may take longer than that.

It’s unclear how Trump will propose to change tax laws. On Feb. 9, he promised a “phenomenal” tax plan in two or three weeks. That was six weeks ago.

His tax proposals changed over the course of his campaign — by Election Day, his plan had moved closer to the blueprint that Ryan and other House leaders prefer. Both plans would consolidate the number of individual income-tax rates to three from the existing seven; the top rate would drop to 33 percent from 39.6 percent currently.

‘Massive’ Cut

Trump has said he wants a “massive” tax cut for the middle class, but independent analyses of the House tax blueprint have concluded that it would benefit high-earners far more.

On corporate taxes, Trump and Ryan have yet to forge an agreement — particularly over the controversial issue of “border adjustments.” Ryan favors replacing the existing 35 percent corporate income tax with a 20 percent tax rate on companies’ domestic sales and imports. Exports would be excluded.

That border-adjusted approach — which opponents say would increase consumer prices — has divided Trump’s White House advisers, and the president hasn’t yet announced a position on it. Leading Republican senators have also expressed reservations. Supporters say higher prices on imported goods would be offset over time by a strengthening dollar.

For all the controversy surrounding it, though, the border-adjustment concept would raise an estimated $1.1 trillion over 10 years, giving Republican tax-cutters breathing space for reducing the corporate rate. Losing that provision will make it more difficult to achieve revenue-neutral tax legislation, complicating its chances in the Senate.

Lower Baseline

The failed health-care bill would have helped. It contained tax cuts of its own, about $999 billion worth over 10 years that would have been paid for by spending cuts — most of them in the federal Medicaid program that provides health care to the poor. Republicans said the resulting lower revenue baseline would have made a revenue-neutral tax overhaul that much easier.

Balancing revenue and cuts in the tax bill would allow it to bypass rules requiring 60 votes in the Senate, where Republicans hold only 52 seats. Democrats — none of whom supported the GOP health-care bill in the House — will be similarly wary on tax legislation, said Senate Minority Leader Chuck Schumer of New York. If the bill winds up benefiting the wealthy and not the middle-class, “it won’t fly either,” he said.

Democrats aren’t the only potential obstacles. As Ryan learned in the health-care setback, the divide between moderate House Republicans and the conservative Freedom Caucus proved impossible to bridge. “The moderates in our conference and the Freedom Caucus are truly at opposite ends of the issues,” said Representative Chris Collins of New York, a Trump ally. “And so you get one, you lose one, you get one, you lose one.”

Mnuchin on Friday didn’t address such concerns, as he predicted a smoother glide path for tax legislation. “Health care and tax reform are two different issues,” he said during an event sponsored by the media company Axios. “Health care is complicated, tax reform is a lot simpler in some ways.”

‘Not Discouraged’

Also upbeat was House Ways and Means Committee Chairman Kevin Brady, the House’s top tax writer, who said Republicans intend to go “full steam ahead” on a tax overhaul, “and we’re gonna work with the administration to get this done.”

“Look, we fought hard for Obamacare repeal, we did fall short,” he said. “I’m not discouraged.”

Still, much depends on Trump’s leadership; his advisers signaled on Friday that he’ll take an active role. “When you see tax reform the first time, it will be the president’s plan and we’ll drive the debate on that,” Mulvaney said during an interview on ABC’s “Good Morning America.”

To drive it effectively, Trump will have to change his ways, said Brian Walsh, a former Senate Republican leadership aide.

“He needs to engage early, often, and consistently, and take his message directly to the American people on the issues he cares about,” said Walsh, who argued that Trump was unnecessarily distracted on the health-care issue. “If the President heeds the lessons from this debate that could bode well for tax reform, but if he does not we could well see a replay of this mess in the months ahead.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Senate Suspends Senator Abdul Ningi for 3 Months Over Budget Padding Allegations

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Abdul-Ahmed-Ningi

The Senate has announced the suspension of Senator Abdul Ningi for three months following his allegations of budget padding to the tune of N3.7 trillion in the 2024 budget.

Ningi, who represents Bauchi Central and chairs the Senate Committee on Population, had made the claims in a recent interview with the Hausa service of the BBC.

During a plenary session, Senator Olamilekan Adeola, the Chairman of the Senate Committee on Appropriations, raised a motion to address Ningi’s allegations, citing the urgent need to address what he termed as “false allegations.”

The transcript of Ningi’s interview was read on the Senate floor, prompting deliberation on the appropriate action to take.

Initially, Senator Jimoh Ibrahim proposed a 12-month suspension for Ningi, but Senator Chris Ekpeyong moved to reduce it to six months.

Eventually, Senator Garba Maidoki amended the motion further, suggesting a three-month suspension.

The amended motion was put to a voice vote, and Senate President Godswill Akpabio announced the decision to suspend Ningi for three months.

Following the ruling, Ningi was escorted out of the Senate chamber by the Sergeants-at-arms.

The suspension comes amidst division within the Senate over Ningi’s claims, with some senators disowning his allegations and calling for a thorough investigation.

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Ekiti Governor Unveils Multi-Billion Naira Relief Programmes Amid Economic Crisis

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Biodun Oyebanji

Ekiti State Governor, Mr. Biodun Abayomi Oyebanji, has announced a comprehensive relief package aimed at alleviating the hardship faced by the people of the state.

The relief programs encompass various sectors to cushion the impact of the economic downturn.

One of the key initiatives entails clearing salary arrears amounting to over N2.7 billion owed to both State and Local Government workers.

This move signifies the government’s commitment to addressing the financial burdens faced by its workforce.

Furthermore, Governor Oyebanji has approved a substantial increase of N600 million per month in the subvention of autonomous institutions, including the Judiciary and tertiary institutions.

This augmentation is intended to enable these institutions to implement wage awards in alignment with State and Local Government workers’ salaries.

In addition to addressing salary arrears, the relief programs extend to pensioners, with the approval of payments totaling N1.5 billion for two months’ pension arrears.

Moreover, an increase in the monthly gratuity payment to state pensioners and local government pensioners will provide additional financial support, totaling N200 million monthly.

The relief initiatives also encompass agricultural and small-scale business sectors.

The allocation of funds for food production and livestock transformation projects underscores the government’s commitment to enhancing food security and economic sustainability at the grassroots level.

Governor Oyebanji emphasized that these relief programs are part of the state’s concerted efforts to mitigate the adverse effects of the economic downturn and foster shared prosperity.

The comprehensive nature of the initiatives reflects a proactive approach towards addressing the challenges faced by Ekiti State residents.

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President Tinubu Orders Immediate Settlement of N342m Electricity Bill for Presidential Villa

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power project

President Bola Tinubu has directed the prompt settlement of a N342 million outstanding electricity bill owed by the Presidential Villa to the Abuja Electricity Distribution Company (AEDC).

This move comes in response to the reconciliation of accounts between the State House Management and the AEDC.

The AEDC had earlier threatened to disconnect electricity services to the Presidential Villa and 86 Federal Government Ministries, Departments, and Agencies (MDAs) over a total outstanding debt of N47.20 billion as of December 2023.

Contrary to the initial claim by the AEDC that the State House owed N923 million in electricity bills, the Presidency clarified that the actual outstanding amount is N342.35 million.

This discrepancy underscores the importance of accurate accounting and reconciliation between entities.

In a statement signed by President Tinubu’s Special Adviser on Information and Strategy, Bayo Onanuga, the Presidency affirmed the commitment to settle the debt promptly.

Chief of Staff Femi Gbajabiamila assured that the debt would be paid to the AEDC before the end of the week.

The directive from the Presidency extends beyond the State House, as Gbajabiamila urged other MDAs to reconcile their accounts with the AEDC and settle their outstanding electricity bills.

The AEDC, on its part, issued a 10-day notice to the affected government agencies to settle their debts or face disconnection.

This development highlights the importance of financial accountability and responsible management of public utilities.

It also underscores the necessity for government entities to fulfill their financial obligations to service providers promptly, ensuring uninterrupted services and avoiding potential disruptions.

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