Publications

The Wall Street Journal reports that Treasury Secretary Mnuchin says that the Trump administration will not support tax legislation that includes a corporate tax rate of more than 20%. While both of the bills being considered by the House and Senate would ultimately cut the corporate tax rate to 20%, the current Senate version would delay the rate cut until 2019 in an effort to save money. WSJ

According to The Washington Post, a bipartisan group of Senators has announced a deal that would raise the threshold for “too-big-to-fail” institutions from banks with $50 billion in assets to those with $250 billion in assets. The proposed legislation would free numerous financial institutions from onerous regulations and stress-test requirements introduced after the recent financial crisis, thereby reducing compliance costs for those institutions. WaPo

Jon Emont of The Wall Street Journal writes that a global acceleration of economic growth has proved to be a boon for international trade flows, though there are reasons to be cautious about the outlook for coming years. Emont warns that protectionist rhetoric, rising debt levels, and demographic shifts may make it difficult for trade to accelerate further in the future. WSJ

The Wall Street Journal reports that despite expectations that used vehicle prices would plummet in 2017, there has been no large-scale price collapse. Used vehicle prices have proven resilient due to improving residual value of used cars and increased demand as a result of the destruction of hundreds of thousands of vehicles in recent hurricanes. WSJ

According to The Wall Street Journal, eleven Pacific-Rim nations say that they have made significant progress in negotiating the Trans-Pacific Partnership despite the U.S.’ withdrawal. Trade experts reportedly see income gains totaling up to $150 billion annually for the remaining members of the pact, who say that they will leave the door open for the U.S. to re-enter at a later date. WSJ

The Wall Street Journal reports that Senate Republicans’ tax reform plan, released yesterday, differs substantially from the House’s bill. To get a bill on the president’s desk by the end of the year, House and Senate Republicans will need to reconcile key differences in their respective tax plans, including the timing of a corporate tax cut and the number of individual tax brackets. WSJ

The Washington Post writes that many retailers took a hit in the third quarter as recent hurricanes deterred shoppers and unseasonably warm weather left large inventories of winter merchandise unsold. Department stores are hoping for a strong fourth quarter to offset any losses, though online shopping continues to pose a threat to many large retailers’ holiday sales. WaPo

The Wall Street Journal reports that a new paper by former Treasury Secretary Lawrence Summers concludes that high productivity has in fact been boosting wages over the last 50 years, though gains from increased productivity have been overwhelmed by a confluence of factors pulling wages down. Summers argues that factors such as the decline in unionization have led to workers’ inability to fully share in wage boosts from productivity. WSJ

According to the Wall Street Journal, Treasury Secretary Mnuchin says that Janet Yellen has not yet decided whether to stay on the Fed board after her term as chairwoman ends early next year. Yellen’s term on the Fed board of governors does not end until 2024, though past Fed chairs have usually stepped down from the central bank after their term as chair ended. WSJ

The Wall Street Journal reports that Senate Republicans aim to preserve the tax deduction for household medical expenses, a deduction the House tax bill would eliminate. Senate Republicans are also considering delaying the start of the corporate tax rate cut but have yet to agree on any specifics. WSJ

Eric Morath of the Wall Street Journal writes that national demand for construction workers remains subdued despite the destruction caused by recent hurricanes. Morath points to a decline in construction job openings in September as recent evidence of soft labor demand, though home building has remained weak throughout the recovery from the Great Recession. WSJ

The Financial Times argues that debt and equity should be taxed in the same way under the Republican tax reform bill. The FT writes that under current law, interest on debt is tax deductible, thereby giving companies an incentive to finance themselves with debt rather than equity and creating instability in financial markets. FT