Tax Reduction and Duty Cancellation: White House Prepares for US Economic Recession

The United States may go for tax cuts and the abolition of certain duties due to the risk of recession, NYT and WP found out. According to them, despite Trump's statements about the excellent state of the economy, the White House began to prepare for decline.

Фото: Depositphotos

The White House began to develop measures to accelerate the growth of the US economy in order to prevent a recession, The New York Times (NYT) and The Washington Post (WP) wrote, citing sources, cited RBC.

According to NYT, among the options discussed are a payroll tax reduction, as well as the abolition of some duties imposed by US President Donald Trump. The presidential administration has already prepared proposals for tax cuts, which will "accelerate" the economy by increasing salaries.

According to the publication, during the presidency of Barack Obama, similar measures were used in the period from 2011 to 2012 year to stimulate economic growth after the recession ended in 2009. We are talking about tax 6,2% of wages. This amount is used to finance social security programs. Last time, the rate on it was reduced to 4,2%.

On the subject: In the US securities market, the last indicator of the approaching recession

At the same time, the White House official statement said that tax cuts for citizens are being discussed, but the payroll tax has not yet been considered, reports WP.

According to NYT, Trump himself is not yet aware of the ideas of his administration and it is not known whether he will agree to this plan, which, if approved by the head of state, will have to be approved in Congress.

In the past, representatives of the US Democratic Party advocated lowering the rate of this tax, while Republicans pointed out that such measures do not help the economy and threaten with a deficit, says WP.

Last week, one of the main indicators of the upcoming recession worked in the US government debt market: the cost of two-year treasury bonds briefly exceeded the yield of ten-year ones. This happened for the first time since the 2007 of the year, subsequently the inversion stopped, but the rates on short and long securities remained almost at the same level.

Against the backdrop of this news, on August 14, US stock markets closed lower: the Dow Jones Industrial Average fell 3,05%, the S&P 500 fell 2,39%, and the NASDAQ fell 3,02%. As a result, the ten richest businessmen in the world, according to Forbes, lost $ 18 billion in total.

On the subject: Next year: Wall Street Banks Warn Investors About Rising Recession Risks

Goldman Sachs analysts have warned that the impact of the US-PRC trade war on the US economy is increasing. In their opinion, the parties are unlikely to conclude a trade agreement before the presidential election in 2020.

Trump himself said that the US economy is “very strong”, despite the Fed's decisions (over the years of Trump's rule, the Fed’s rates have repeatedly raised. - RBC). In his view, Democrats want her to be bad for goals related to the presidential election in 2020.

“Very selfish! Our dollar is so strong that, unfortunately, it hurts other parts of the world, ”he wrote on Twitter, adding that the Fed’s rate should be reduced by at least 100 basis points.

“If this happened, our economy would be even better, and the global economy would be significantly and rapidly improved,” Trump concluded.

Read also on ForumDaily:

In the US securities market, the last indicator of the approaching recession

The United States recognized China as a currency manipulator: the richest people in the world are poor

Nearly half of 500's most profitable US companies were founded by immigrants and their children.

The total debt of Americans reached a record level

Do you want more important and interesting news about life in the USA and immigration to America? — support us donate! Also subscribe to our page Facebook. Select the “Priority in display” option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram  and Instagram- there is a lot of interesting things there. And join thousands of readers ForumDaily New York — there you will find a lot of interesting and positive information about life in the metropolis.