- UK Public Schools Forcing Girls As Young As Four To Wear Muslim Veil
Research published in The Sunday Times this week revealed that eight state-funded British schools are forcing children to wear the Islamic hijab along with other Muslim female dress code requirements, which includes girls as young as four. The findings are based on open source investigations into published dress code directives of 176 Muslim schools across Britain, most of which are private.
However, the new discovery of public schools among them has sparked outrage across the UK, especially as three of the schools are elementary level schools (including kindergarten). According to The Sunday Times:
Girls as young as four are being “forced to wear the hijab” as part of approved school uniform in state-funded Islamic schools, campaigners have told ministers.
According to research by the National Secular Society, the hijab appears to be compulsory in eight state-funded Islamic schools in England, including three primary schools.
A further 51 private Islamic schools of the 176 surveyed by the society also require the headscarf to be worn by female pupils. Eighteen schools said wearing the head covering was optional.
Shockingly, one particular school called the Independent Olive Secondary requires that, “Hair should be covered by a black scarf; outside the School the face must be covered,” while another UK school is explicit in stipulating that, "It is very important that the uniform is loose fitting and modest and that the hijaab is fitted closely to the head. The College uniform is COMPULSORY" (sic). The Tayyibah Girls School in London warns: "The school is not willing to compromise on any issues regarding uniform."
The Tayyibah Girls School in London.Meanwhile, some schools go so far as to recommend the niqab. For example girls at Al-Ihsaan school in Leicester are told they must wear either a “jilbaab or niqab”. The jilbaab is a long and loose-fitting gown which covers the entire body expect for hands, face, and feet. But the niqab recommendation is much more significant in that it is practiced by only a small minority within the Muslim world – it covers the entire face except for the eyes, and is typically worn with black garments with cover head to toe.
In addition to the eight publicly funded schools which require head coverings of veils, thirteen others cite an optional hijab as part of their uniform policy. Islamic academies in Britain came under scrutiny early this month when a previous Times story first reported that "Thousands of state primary schools are allowing girls as young as five to wear the Muslim religious headscarf as part of approved school uniform, a Sunday Times survey has revealed."
The earlier investigation found that even Church of England associated schools were increasingly adopting various forms of Islamic dress as acceptable among students:
Last month a survey by The Sunday Times revealed that nearly a fifth (18%) of 800 state primary schools, including Church of England primaries, in 11 regions of England now list the hijab as part of their uniform policy, mostly as an optional item.
Feversham College is a high school level academy specializing in Science for Muslim girls aged 11-18 years. It's website spells out that a "close-fitting" hijab is "COMPULSORY" (sic).
Activists associated with the investigation cited by The Sunday Times called the uniform requirements “illiberal and repressive” and stated, “no child should be obliged to wear the hijab or any other article of religious clothing while at school.” Included among those appealing to the UK education secretary to root out such practices, especially when they appear at state funded schools, are Muslim women activists.
Of course, it's mostly a good thing when the state leaves private religious schools alone to do or require whatever they want in terms of dress code, but that state funded UK schools would enforce Muslim veils is the deepest hypocrisy in a country which has recently been known to target and punish families wanting to opt out of LGBT related curriculum. The British authorities have even threatened Orthodox Jewish schools with closure with the ultimatum: "teach your children about homosexuality and gender reassignment, or we will close you down."
In a trend that began years ago, the British education secretary began warning even Christian private schools that their teaching curriculum must reflect the "UK values" and laws concerning transgender recognition. The government now routinely cites "combating extremist" as a motive for getting private schools to conform.
- Meet Yvonne Felcara – Antifa Leader Arrested After Scuffle In Berkeley
Authored by Nikita Vladimirov via CampusReform.org,
Prominent anti-fascist leader Yvonne Felarca was arrested Tuesday following a rowdy Antifa “Victory March” in Berkeley, California.
Felarca, a 47-year-old middle school teacher who leads the Coalition to Defend Affirmative Action, Integration & Immigrant Rights and Fight for Equality by Any Means Necessary (BAMN), was arrested following a scuffle with demonstrators who had turned out for a Patriot Prayer rally.
Images and video obtained by Campus Reform appear to show Felarca being surrounded by numerous police officers in riot gear in the middle of the street.
According to an eyewitness on the ground, the activist was then taken to the back of a police car that promptly left the scene.
Felarca, an organizer of many anti-fascist demonstrations in Berkeley, has a history of publically advocating for violence against her political opponents.
Earlier in the summer, Felarca was arrested and charged with inciting a riot after she openly punched a member of a white nationalist organization who was peacefully protesting in the street.
According to numerous reports, the video of the incident showed Felarca punching the man in the stomach while shouting “get the fuck off our streets.”
The political organizer has also frequently clashed with the Republican students at Berkeley, accusing them, without evidence, of “stalking women” and targeting minorities.
* * *
UPDATE: Berkeley Police has released Felarca's mugshot via Twitter, confirming that she was arrested for "battery and resisting arrest."
- Brandon Smith Rages: "NFL Players Have A First Amendment Right To Act Like Little Bitches"
Authored by Brandon Smith via Alt-Market.com,
Frankly, in my view, the sporting world should be a politics free zone, and the fact that I am compelled to write about politics in sports in America today is bewildering beyond belief.
That said, to be clear, I am not a fan of the NFL. I think the sport, like most professional sports, is overrun with whiny, juiced-up morons paid millions of dollars for providing nothing to the public except sub-par entertainment and little-to-no loyalty to the state or city in which they happen to be employed.
NFL players are not legitimate role models for society anymore than costumed television wrestlers are role models for society.
Add to this the rampant politicization of the NFL over the past several years with social justice undertones and overtones, and I can't think of a single redeeming quality to the arena. The best thing that could possibly happen to U.S. athletics would be if the entire system was scrapped and rebuilt from the ashes with truly local teams composed of local players driven purely by the desire for athletic excellence and healthy competition.
To me, it seems the appeal of sports, at least for spectators, is the possibility that anything could happen according to the merit of the players and the teams. In a society in which so much is restricted and controlled and dictated by political correctness and appeals to artificial "fairness," the idea that, at least on a football field, baseball diamond or hockey rink, all of that garbage goes out the window for a few hours is enticing to say the least. Spontaneous moments of greatness are what people want to see, not blithe displays of ideological ignorance.
There is no social justice in real sports. There is no affirmative action. There are no safe spaces. The best men or women rise to the top and the losers go home with nothing. That is the way it should be. Champions soar to the heights as easily as they fall to the depths, and underdogs can shock the world through sheer determination. You cannot lie or steal your way to athletic superiority. You cannot use victim-group status to win trophies and medals. You have to work hard. You have to earn it. If you are a fraud you will be found out eventually. This is a philosophy which has been lost in modern athletics. Leftists in our culture are also oblivious to the notion.
When I see one of the last fields of American heritage and meritocracy being destroyed by cultural Marxism, I do feel what I'm sure many people feel — enraged. However, the situation is more complex than surface conflicts suggest.
NFL players refusing to stand for the national anthem is not really the issue here. Donald Trump admonishing them for their actions is also not the issue here. It is the motivations behind both sides that concerns me.
For activist NFL players and owners the motivation is rather clear; social justice cultism has seeped into their profession and some of them have decided to use the platform they have been given to pontificate rather than play the game they are paid to play. Protests attacking non-existent racism and "patriarchy" against a system that has made these men multi-millionaire celebrities regardless of their skin color would be relegated to the idiocy of college campuses if any of these people had any sense of judgment.
For Donald Trump, the motivation is far more foggy. I would prefer if the president of the United States spent his energies on fulfilling his campaign promise of "draining the swamp" of banking elites and neo-con warmongers instead of loading his cabinet with them and spouting off on Twitter about forcing a few football players to stand for a national anthem that praises the freedom of rebellion.
My readers are well aware that I view Trump as a pied piper, leading conservatives down a path back to neo-con totalitarianism rather than towards libertarian virtues of individual sovereignty. In other words, I am not seeing much difference between Trump and Obama so far. Perhaps in rhetoric, but certainly not in action.
The circus surrounding Trump's latest feud with the NFL is just another distraction away from the fact that this administration is following a very similar policy path to every other corrupt administration before it. And conservatives are so tired of the trespasses of the social justice cult, many of them are eating up every minute of the farce. Though, this is not what a bunch of football players are concerned about.
Let's summarize the actual problem…
If NFL players refused to stand for the national anthem because they believed in the ideals it represents but felt that our government no longer represented those ideals, then I would be in full support of their motives. Obviously, this is not why they are protesting. If their motivation was about speaking against corrupt government, then they would have refused to stand for the anthem back when Barack Obama, a Constitution-wrecking cabana boy for the elites, was in office.
If Trump's attacks on the NFL were motivated by a love of liberty as the anthem inspires, then he would not demand that players be forced to stand, which is indeed a violation of their First Amendment rights. Instead, he would have dropped that concept completely and stuck with the rational side of his position, which was for spectators to vote with their wallets and stop supporting the league with their dollars.
The bottom line is, whether or not you or I support their motives, constitutionally, legal precedence is on the side of the players. They have every right to act like bitches on an SJW plantation, kneeling and virtue signaling to their heart's content. And, the public has every right to stop watching the NFL, drop their ESPN subscriptions, throw their overpriced sports jerseys in the trash and move on to more important issues… like what the hell is all this nonsense with North Korea? And why do we keep hearing about economic recovery when the average American can't make it from month-to-month without running up their credit cards? And why are so many of us so damn fat and unhealthy?
Hell, here's an idea — how about more people stop watching sports and start playing sports instead? Why not simply let the NFL die out along with every other venture poisoned by social justice?
The point is, the NFL battle with Trump is irrelevant compared to the greater battle of ideals behind it. It is not for Trump to fight this battle; it is for the spectators and consumers to fight this battle. The solution is not Trump's Twitter account or his interference. The solution is for Americans to walk away and take their money with them.
The solution is also not to attempt legislation or government force to strike fear into those who might disagree with us. I have seen far too many so-called "liberty minded" people repeat the fanatically stupid mantra of "stomp my flag and I'll stomp your ass!" The great sacrifice of living in a free country is that you have to support the individual rights of EVERYONE, even people who don't believe in individual rights.
Some might argue that this is not a path that is being pursued so we should not be concerned. I say the social undercurrent today is ripe for zealotry on both sides, and conservatives need to take the high road even if it means things will be more difficult for us in the short term.
Finally, to the players that have so far jumped on the Colin Kaepernick bandwagon; understand that you have delusions of grandeur. You are NOT Jesse Owens proving your worth in the face of Hitler's Aryan dystopia. You are not important or effective activists in the grand scheme of things because your political and philosophical views are ill informed and generally incompetent. In fact, your views work in FAVOR of the corrupt system, not against it.
While you do have the right to sit during the national anthem, knowing why you are sitting is more important than the action itself. If you are sitting because you have bought into a cultural Marxist con game that is using you as fodder for political division, then perhaps you should rethink your little protest and try working towards concrete solutions.
If you are going to use race and social inequality as a crux for your theatrical displays of "defiance" as you are cashing checks for millions in sponsorship deals paid for primarily by white people, then I think you will find most of America laughing at you in the end. Show us your true resolve and refuse that dirty imperialist money. Otherwise, you are just another over-privileged punk pretending to be under-privileged in order to gain notoriety at the expense of reason.
- Maduro To Generals: Prepare For War With "Criminal Empire" US
After barely managing to scrape together the nearly $200 million needed to make a bond payment earlier this month (the country made the payment a week late), Embattled Venezeulan President Nicolas Maduro is refocusing his attention on the US, warning military leaders Tuesday to begin preparing for war with the US. Maduro's call to arms comes after the US has repeatedly tightened sanctions against Maduro's regime and the country's state-run oil company; earlier this week, the Trump administration blocked Venezeulan officials from entering the US as part of the White House's new “targeted” travel ban. Trump has also repeatedly threatened a military intervention if Maduro doesn't leave voluntarily.
Maduro is probably still brooding over Trump’s call for the world community to help restore “democracy and political freedoms” to Venezeula by ousting Maduro (to which Maduro reportedly responded in typical leftist fashion by comparing Trump to Hitler). Trump made those remarks last week during his first address to the UN General Assembly. Earlier this year, Trump said he wouldn't rule out a military option for dealing with Venezuela, adding that the US has an obligation to take of the country because it's "our neighbor."
Maduro said Trump’s threats were the reason for him ordering the military to be on alert.
"We have been shamelessly threatened by the most criminal empire that ever existed and we have the obligation to prepare ourselves to guarantee peace," said Maduro, who wore a green uniform and a military hat as he spoke with his army top brass during a military exercise involving tanks and missiles. "We need to have rifles, missiles and well-oiled tanks at the ready….to defend every inch of the territory if needs be," he added.
Over the summer, the US announced sanctions to prevent PDVSA, Venezuela’s state-owed oil company, from issuing new debt (sanctions that conveniently avoided existing bonds held by Goldman Sachs), while also preventing Citgo, the US subsidiary of PDVSA, from repatriating dividends. The US has also passed sanctions against many top Venezuelan officials. Tensions between Maduro and Trump started escalating shortly after Trump’s inauguration, when the US blacklisted Venezuelan Vice President Tareck El Aissami for drug trafficking.
Maduro referenced the sanctions during his speech at the military base. As he spoke, Russian military planes flew in the sky as part of the training exercise, according to Newsweek.
"The future of humanity cannot be the world of illegal sanctions, of economic persecution," Maduro said.
Of course, Maduro doesn't have the manpower to stand up to the US’s much-larger military. The embattled leader has managed to cling to power in Venezuela despite mounting political and economic crises that have inspired months of deadly anti-government demonstrations in the streets of the capital, Caracas and many other cities around the country.
As Newsweek reports, Defense Minister Vladimir Padrino has backed Maduro through the unrest, but Reuters reported back in August that there may be growing support for a military-backed coup against Maduro, whose approval rating remains at all-time lows, even as he has succeeded in consolidating power and marginalizing his opposition.
The country has managed to avoid financial calamity with the help of Russia and China. However, Newsweek reports that China is beginning to limit its exposure to Venezuela amid the mounting political unrest.
- FEMA Director Urges Americans To Develop "A True Culture Of Preparedness" But No One Is Listening
Authord by Daisy Luther via The Organic Prepper blog,
It looks like preppers aren’t that crazy after all.
FEMA’s new director, Brock Long, has repeatedly said that Americans do not have a “culture of preparedness,” something that is much-needed with the startling uptick in natural disasters. Long has only been the director of FEMA since June 20 of this year and already has had to deal with a historic number of disasters in this short period of time.
It appears that Mr. Long has a mindset of self-reliance based on a couple of recent statements he has made to the media, but the MSM doesn’t seem too interested in his ideas about fostering a culture of preparedness, despite the practicality and essential nature of his suggestions.
First, in an interview from Sept. 11 that I personally only heard about yesterday, FEMA’s new director, Brock Long, spoke with journalists to discuss the response to Hurricane Irma. In the interview, he said some things that vindicate all of us who have spent time and money working toward being prepared.
“I really think that we have a long way to go to create a true culture of preparedness within our citizenry in America. No American, no citizen, no visitor to this country is immune to disaster. And we have a long way to go to get people to understand the hazards based on where they dwell, where they work, and how to be prepared financially, how to be prepared through insurance, how to have continuity of operations plans for their businesses, so that we can avoid the suffering, the strife, and the loss of life. It’s truly disappointing that people won’t heed the warnings.
Straight out of our favorite prepper handbooks, right?
Of course, the reporter quickly shifted from the actual useful information to start asking about climate change, because for some reason she felt that was far more essential than the practical advice Mr. Long was offering. You can watch the interview below.
Some of those numbers were shocking – FEMA is spending 200 million dollars a day in relief efforts and desperately-needed help has hardly even begun for Puerto Rico and the US Virgin Islands.
In a more recent statement, Mr. Long re-emphasized the need to be prepared, and to start kids off young with this mindset.
I think that the last 35 days or so have been a gut check for Americans that we do not have a true culture of preparedness in this country. And we’ve got a lot of work to do.
Whether it’s in education and being ready, it’s not just saying, hey, have three days worth of supplies ready to go. It’s greater than that. It’s also people having the finances and the savings to be able to overcome simple emergencies.
We have to hit the reset button and create a true culture of preparedness starting at a very young age and filtering all the way up.
We in the preparedness community have been saying this for ages, Mr. Long, but thank you for attempting to put this front and center.
One thing that is different about Long’s approach is the practicality. Many government officials seem to forget about the financial end of emergencies. They can’t seem to wrap their brains around the fact that while they have 200 million dollars a day, most folks do not. This is why financial preparedness is of such massive importance. If you had to live away from home without access to a kitchen, the expenses would rack up pretty quickly. As well, think about how thinly those millions are spread.
FEMA is eventually going to run out of money.
As well, think about how thinly those millions are spread. One person I know who lost her rental home will receive $4000. That has to replace everything she owns: furniture, clothing, personal items, food, cleaning products…you get the idea…plus pay first and last month’s rent for a new apartment. People without flood insurance who lost their homes will be eligible for a maximum of only $21,000. But if their property wasn’t paid for, they’ll still owe the mortgage payments on a place that is uninhabitable.
Don’t forget that FEMA is also providing aid for those displaced by more than 2 million acres of wildfires throughout the Western US. (Although initially, they turned down requests for assistance, they reconsidered.)
When you look at the true cost of disasters on this scale, it’s hard to imagine that FEMA will have enough money should these emergencies continue, or even enough to cover our current tab.
There were reports that FEMA had run out of money shortly after Hurricane Harvey, but more appeared for Hurricane Irma.
One article blithely suggested that FEMA can never run out of money because Congress will just vote to give them more when addressing concerns that FEMA was down to its last billion dollars.
But the U.S. Congress quickly put such worries to rest on Sept. 8, 2017, by hastily passing legislation that gave the DRF an infusion of cash.
“The emergency supplemental appropriation of $7.4 billion allows FEMA to continue to fully focus on the ongoing preparation, response, and recovery needs,” said an agency spokesperson via email.
While legislators may have cut it a bit close, there was little chance that FEMA actually would run out of cash. According to a Congressional Research Service analysis, Congress made 14 supplemental appropriations to the fund between 2004 and 2013, for a total of $89.6 billion. In one year alone — 2005, the year that Hurricane Katrina devastated New Orleans and other areas in the Gulf Coast — legislators bolstered the fund with three extra appropriations amounting to $43 billion. (source)
This, of course, naively assumes that there will always be more money to give to FEMA. Eventually, we’re going to run out.
Is this the reason for the slow response to Puerto Rico?
Personally, I keep wondering if a lack of money is the reason for our slow response to the desperate situation in Puerto Rico. Add to this the logistical problems, and you have a recipe for chaos.
Another thing to keep in mind about Puerto Rico is that this is one of the rare situations in which stockpile preparedness may not have done any good. While some folks like to say that Puerto Ricans shouldn’t be out of food within 6 days after the disaster, what they aren’t considering is the totality of the destruction.
What food people may have had stored was destroyed when homes were turned into piles of rubble. Other food spoiled soon after the power for the entire island was taken out. If you look at these photos, you will understand why few people have food.
I imagine in such a situation, my own carefully preserved jars of food would have been smashed to bits and my freeze-dried food would have been soaked in flood waters. In most situations, your stockpile will see you through, but in a disaster of this magnitude, even the most well-prepared person could be left with nothing.
Maybe money is why the director is urging a culture of preparedness
Perhaps this reality is why Mr. Long is so adamant that Americans need to get prepared to take care of themselves and that we need to raise our children to understand this too. That’s not the warm fuzzy thing that people who refuse to prepare want to hear, so the mainstream media gives his advice little attention. A culture of preparedness is indeed the answer, and preppers have known this for a very long time.
If you are interested in being better prepared, be sure to sign up for this daily newsletter.
- Morgan Stanley's Mike Wilson is Calling For a Boom and a Bust in Stocks
This is what you’re paying for, clients of Morgan Stanley. You get Mike Wilson, Chief U.S. Equity Strategist and Chief Investment Officer, the most bullish of analysts on Wall Street, while also being the most bearish.
How wonderful.
Asshat, Morgan StanleyTo best experience the dynamics of Mike Wilson’s intricate market call, first I advise you to sit back, relax, and drink a fifth of vodka — straight from the bottle — then doze off in that nice rocking chair of yours and be prepared to vomit when you wake up.
He’s calling for S&P 2,700 by Q2 of 2018, roughly 10% higher from present levels. In a televised interview on CNBC yesterday, he described a market that would saunter higher, amidst cheerful baskets of flowers being tossed upon investors. There wouldn’t be any cause for concern, until his price target was met — at which time grave horrors would unfold — leaving top tickers stranded at the altar — raped, battered, and bruised.
After the market soars to new record levels, a pox will befall equities, shattering dreams and stopping pace makers. The S&P 500 will fall by 20%, drowning investors in a bear market that is both menacing and harrowing.
Until then, earnings should drive gains and potential economic stimulus will keep the party train going, leisurely stocked with the strongest and the purest strains of cocaine, booze, and hookers.
“Today is a short term euphoria but we think this is the primary trend: Small caps, financials energy” are all opportunities for investors. “That doesn’t mean that FANG or tech gets left behind. They can both work in concert now. So I think this is the next leg.”
While markets should trade higher, up until it crests at Wilson’s ghostly target of 2,700, he does caution investors that is could trade down, rather severely, at any given moment. He’s calling for a possible retracement of 5-6% by late October to early November. In the event that doesn’t happen, well then, stocks should trade higher.
“I think the way it sets up is people probably get excited over the next couple of weeks,” said Wilson, also chief investment officer of institutional securities and wealth management. Wilson said he expects earnings to keep buoying the market. “Then we’re going to have the inevitable disappointment.”
Wilson also took a shot at his peers for being wrong about a summer correction, smugly reminding them of what drives stocks in this market.
The reason why stocks went higher this summer, as opposed to lower, was simple, according to Wilson — “It survived the test. The reason it survived the test is that fundamentals are too good,” he said. “There’s two ways to correct an overbought market. You could go down or you could go sideways. We took that latter route. “
After the 5-6% fall correction, stocks will extricate themselves from the ribald glumness of Autumn and reassert a bullish vigor — sending it to new record highs at 2,700.
“We’ll get to 2,700 first, and then the timing of the beginning of the cyclical bear could be imminent. It could be any time after that. It could be as early as the second half of next year,” he said in the telephone interview.
To avoid sounding absurd, or even ridiculous, Mr. Wilson reminded the reps at Morgan Stanley that butcherous market slaughterings are quite normal happenings for stocks — in spite of them becoming increasingly rare in the 8th year of the present bull market.
He summed up his intellectually diverse market call as calling for both a boom and a bust, having it both ways, having cake and eating it too.
“I think this is the trick…Be careful what you wish for. We’re late cycle. We made this call back in April. We’re looking for the boom, bust,” he said. The boom is the bump and euphoria from fiscal stimulus, and investors could get excited about tax cuts sometime early next year. “It actually brings the end of the cycle. That’s the irony.”
Prepare for both gains and losses, ups and downs.
Thank you Morgan Stanley.
- Robots Have Ushered In An Era Of "Cocaine Deflation" On Wall Street
Authored by
Brazilian Police have stumbled into a cocaine workshop with robots packing 150,000 cocaine baggies per day. The era of cocaine deflation is upon Wall Street, as drug lords in Brazil are betting on automation to ramp up production.
Perhaps this 'automation' is why Brazil's cocaine prices have suffered such a deflationary collapse…
…And it looks like the benefits of automation haven’t been limited to the market for cocaine…
…During Congressional testimony last month, Fed Chairwoman Janet Yellen named unlimited cell phoe data plans as one of several "special one-time transitory factors" that has weighed on inflation thiis year. We wonder: will this be Janet Yellen's next 'transtory' reason for low inflation…?
- The “Trump Tax Plan” – Details & Analysis
Submitted by Lance Roberts of Real Investment Advice
Almost a full year after the election of Donald Trump to the White House, one of the key promises made to voters was the largest “tax cut” since Ronald Reagan was in office. As President Trump stated in Indiana yesterday:
“This is a revolutionary change, and the biggest winners will be middle-class workers as jobs start pouring into our country, as companies start competing for American labor, and as wages continue to grow. This will be the lowest top marginal income tax rate for small and mid-size businesses in more than 80 years.”
Here are the major points as summed up by BI.
Business tax changes:
- A 20% corporate tax rate. This is the first time Trump has publicly backed down from one of his earliest campaign promises: a 15% corporate tax rate. The budget math required for a 15% rate was too difficult, so the somewhat higher rate is the opening bid. The current statutory federal rate is 35%.
- A 25% rate for pass-through businesses. Instead of getting taxed at an individual rate for business profits, people who own their own business would pay at the pass-through rate. The plan also says it will consider rules to prevent “personal income” from being taxed at this rate. Mnuchin previously suggested there may be limitations on what types of businesses get this rate — it could apply only to goods producers and not service-oriented companies to prevent people from creating limited-liability corporations to store their assets and receive a lower rate.
- Elimination of some business deductions, industry-specific incentives, and more. There are few details, but the plan includes language regarding the “streamlining” of business tax breaks.
- A one-time repatriation tax. All overseas assets from US-owned companies would be considered repatriated and taxed at a one-time lower rate — this is designed to bring corporate profits back from overseas. Illiquid assets like real estate would be taxed at a lower rate than cash or cash equivalents, and the payments would be spread out over time. While there is no precise number in the plan, officials have indicated the rate could end up somewhere around 10%.
Personal tax changes:
- A bottom individual tax rate of 12%. The plan specifies three tax brackets, with the lowest rate being 12%. That would represent a slight bump in the bottom bracket, which is now 10%. People currently in the 15% marginal tax bracket would most likely be included here.
- A middle tax bracket of 25%. The incomes in this bracket aren’t specified.
- The top individual tax rate of 35%. The current top rate is 39.6%.
- The possibility of a fourth, higher bracket. Because of Trump’s insistence that taxes for the wealthiest Americans not decrease, the plan proposes the possibility of a fourth tax bracket at a rate higher than 35% if the tax-writing committees wish. “An additional top rate may apply to the highest-income taxpayers to ensure that the reformed tax code is at least as progressive as the existing tax code and does not shift the tax burden from high-income to lower- and middle-income taxpayers,” the plan reads.
- A larger standard deduction. To avoid raising taxes on those currently in the 10% tax bracket, the standard deduction for all taxes would increase to $12,000 for individuals (up from $6,350) and $24,000 for married couples (up from $12,700). These are slightly less than the doubled deductions expected and the idea this would save people money may be misleading.
- Eliminates most itemized deductions. The only deduction preserved explicitly in the plan is for charitable gifts and home-mortgage interest.
- Increases the size of the child tax credit. A pet project of Ivanka Trump, the proposal is to make the first $1,000 of the child tax credit refundable and increase the income level at which the credit would phase out.
- Vague promises on retirement savings and other deductions. Sections of the plan refer to retirement savings and other “provisions,” but details are sparse.
- Elimination of the state and local tax deduction. The so-called SALT deduction allows people to deduct what they pay in state and local taxes from their federal tax bill. Most of the people who take this deduction are wealthier Americans in Democratic states — about one-third of the beneficiaries are in New York, New Jersey, and California.
- Elimination of the estate tax. Called the “death tax” in the plan, this applies only to inherited assets totaling $5.49 million or more in 2017. Very few households pay the estate tax, but it has long been a target for Republicans.
Devil In The Details
As in always the case, there are some important points to remember. This is just a proposal. This will have to go through several drafts, negotiations, and tweaking before a final bill is voted on by the House. It will then go to Senate for changes and a vote. IF, and that is a big if, it is passed by the Senate the bill returns to the House where the bill will be reconciled before it is passed onto the President for his signature.
The bill, as proposed today, will likely look very different by the time it is actually voted on.However, as is always the case, the “devil is in the details.”
First, as the Committee for a Responsible Federal Budget lays out:
“Tax cuts shouldn’t be handed out like Halloween candy. To grow the economy, they must be paid for, and the details of this plan appear to come up $2 to 2.5 trillion short.
Deficit-financed tax cuts are a recipe for a short-term economic sugar high followed by sluggish long-term growth.
Without sufficient details on how or even if these tax cuts will be fully paid for, this outline is nothing more than a fiscal fantasy.
Tax reform remains one of the most important national objectives. Fiscally responsible tax reform would not only improve simplicity and fairness, but can actually grow the economy and help to improve the dangerous fiscal situation we face.
But the difference between tax reform that would grow the economy, and tax cuts that would grow the debt, cannot be made up for with wishful thinking or magical economic growth. And tax cuts certainly don’t pay for themselves.“
Furthermore, the CFRB picks up on a particularly important point that headlines have seemed to overlook:
“Making many assumptions about the plan – including that the brackets apply to the same income as the Trump campaign’s plan, that its 25 percent pass-through rate contains guardrails so it only applies to active business income, and that the limit on interest makes up about half the revenue lost from expensing – we estimate the plan has about $5.8 trillion over a decade of gross tax cuts and would cost $2.2 trillion on net through 2027. Given that it calls for only five years of expensing rather than permanent – a major budget gimmick – it also potentially sets the stage for an extenders package of over $1 trillion when expensing expires.”
But even before we can get to tax reform, the issue of the budget must be addressed first. As Congressman Kevin Brady, Chairman of the House Ways And Means Committee, stated during a recent interview on the “Lance Roberts Show:”
“No budget, no tax-reform.”
Without a budget for 2018, the tax bill cannot be passed using “reconciliation” which would only require a 51-vote majority versus the currently required 60-vote majority under Senate rules.
Passing a budget has been an impossible feat over the last 8-years with the government currently operating under another continuing resolution (“CR”) until December of this year. (That means spending remains at the same level as the previous budget, last passed in 2008, with an 8% baseline increase.)
The debate over the budget will be contentious enough with threats of a Government “shutdown” now an annual event. But some GOP members, however, have suggested combining another attempt at repealing Obamacare with the tax bill for 2018 reconciliation. This will make an already difficult undertaking even more complicated.
“The issue of tax reform is not going to be an easy one. With such a deeply partisan government the probability of passing tax reform as currently proposed is extremely slim. Furthermore, while I do expect that some version of tax reform will eventually get passed, it will likely take much longer than most expect. The chart below shows the current chasm leading to the difficulty of getting anything accomplished in Washington.”
Already, Democrats are aligning to push back against the proposed legislation:
“If this framework is all about the middle class, then Trump tower is middle-class housing,” – Senator Ron Wyden (D)
“This would cost anywhere from 5 to 7 TRILLION dollars and they have no credible plan to pay for it… If they don’t pay for it, they’ll balloon the deficit and debt….” – Senator Chuck Schumer (D)
And most importantly:
“Tax reform is going to make health care look like a piece of cake,” – Retiring Sen. Bob Corker.
This is why there hasn’t been a major piece of tax legislation enacted since Ronald Reagan was in office.
Economic Outcomes Likely Disappointing
Do not misunderstand me. Tax rates CAN make a difference in the short run particularly when coming out of a recession as it frees up capital for productive investment at a time when recovering economic growth and pent-up demand require it.
However, in the long run, it is the direction and trend of economic growth that drives employment. The reason I say “direction and trend” is because, as you will see by the vertical blue dashed line, beginning in 1980, both the direction and trend of economic growth in the United States changed for the worse.
Furthermore, as I noted previously, Reagan’s tax cuts were timely due to the economic, fiscal, and valuation backdrop which is diametrically opposed to the situation today.
“Importantly, as has been stated, the proposed tax cut by President-elect Trump will be the largest since Ronald Reagan. However, in order to make valid assumptions on the potential impact of the tax cut on the economy, earnings and the markets, we need to review the differences between the Reagan and Trump eras.My colleague, Michael Lebowitz, recently penned the following on this exact issue.
‘Many investors are suddenly comparing Trump’s economic policy proposals to those of Ronald Reagan. For those that deem that bullish, we remind you that the economic environment and potential growth of 1982 was vastly different than it is today. Consider the following table:’”
The differences between today’s economic and market environment could not be starker. The tailwinds provided by initial deregulation, consumer leveraging and declining interest rates and inflation provided huge tailwinds for corporate profitability growth. The chart below shows the ramp up in government debt since Reagan versus subsequent economic growth and tax rates.
Of course, as noted, rising debt levels is the real impediment to longer-term increases in economic growth. When 75% of your current Federal Budget goes to entitlements and debt service, there is little left over for the expansion of the economic growth.
The tailwinds enjoyed by Reagan are now headwinds for Trump as the economic “boom” of the 80’s and 90’s was really not much more than a debt-driven illusion that has now come home to roost. (More discussion on this problem here, here and here)
Tax Cuts Don’t Reduce The Deficit
Senator Pat Toomey, a Pennsylvania Republican who sits on the finance committee, said he was confident that a growing economy would pay for the tax cuts and that the plan was fiscally responsible.
“This tax plan will be deficit reducing,”
The belief that tax cuts will eventually become revenue neutral due to expanded economic growth is a fallacy. As the CRFB noted:
“Given today’s record-high levels of national debt, the country cannot afford a deficit-financed tax cut. Tax reform that adds to the debt is likely to slow, rather than improve, long-term economic growth.”
The problem with the claims that tax cuts reduce the deficit is that there is NO evidence to support the claim. The increases in deficit spending to supplant weaker economic growth has been apparent with larger deficits leading to further weakness in economic growth. In fact, ever since Reagan first lowered taxes in the ’80’s both GDP growth and the deficit have only headed in one direction – lower.
As noted above, there are massive differences between the economic and debt related backdrops between the early 80’s and today.
The true burden on taxpayers is government spending, because the debt requires future interest payments out of future taxes. As debt levels, and subsequently deficits, increase, economic growth is burdened by the diversion of revenue from productive investments into debt service.
While lowering corporate tax rates will certainly help businesses potentially increase their bottom line earnings, there is a high probability that it will not “trickle down” to middle-class America.
While I am certainly hopeful for meaningful changes in tax reform, deregulation and a move back towards a middle-right political agenda, from an investment standpoint there are many economic challenges that are not policy driven.
- Demographics
- Structural employment shifts
- Technological innovations
- Globalization
- Financialization
- Global debt
These challenges will continue to weigh on economic growth, wages and standards of living into the foreseeable future. As a result, incremental tax and policy changes will have a more muted effect on the economy as well.
As Mike concluded in his missive:
“As investors, we must understand the popular narrative and respect it as it is a formidable short-term force driving the market. That said, we also must understand whether there is logic and truth behind the narrative. In the late 1990’s, investors bought into the new economy narrative. By 2002, the market reminded them that the narrative was born of greed not reality. Similarly, in the early to mid-2000’s real estate investors were lead to believe that real-estate prices never decline.
The bottom line is that one should respect the narrative and its ability to propel the market higher.“
Will “Trumponomics” change the course of the U.S. economy? I certainly hope so. Unfortunately, there is no evidence that such has ever been the case.
As investors, we must understand the difference between a “narrative-driven” advance and one driven by strengthening fundamentals. The first is short-term and leads to bad outcomes. The other isn’t, and doesn’t.
Full text of Tax Reform plan below.
- United States And Russia To Build NASA-Led Space Station
Content originally published at iBankCoin.com
The liberal science community has a moral dilemma on its hands following today’s announcement that the United States is partnering with Russia on a NASA-led project to build an orbiting lunar station.On one hand, the international base for lunar exploration will serve as a “gateway to deep space and the lunar surface,” according to NASA.
On the other hand, Russia is involved – which means they’ll undoubtedly slit our throats in space, populate the surface of the moon, build a moon cannon (having read a U.S. astronaut’s Heinlein collection), and fire silicon, magnesium, and aluminum-rich moon rocks at the United States. Once we are obliterated, Russia will invade the country and enslave all surviving Americans in moon-rock crushing factories.
Pretending not to be evil, Igor Komarov – Roscosmos’s general director, stated that Russia, the United States and other participants agreed it was important to work using unified standards to avoid future problems in space, citing Sandra Bullock’s movie “Gravity” in the process.“Roscosmos and NASA have already agreed on standards for a docking unit of the future station,” the Russian space agency said.
AFP reports:
“Taking into account the country’s extensive experience in developing docking units, the station’s future elements — as well as standards for life-support systems — will be created using Russian designs.”
NASA said it planned to expand human presence into the solar system using its new deep space exploration transportation systems, the Space Launch System rocket and Orion spacecraft.
– ‘Better to fly together’ –
Russia and the United States also discussed using Moscow’s Proton-M and Angara rockets as well as other spacecraft to help create the infrastructure of the lunar spaceport, the Russian statement said, adding that the main works were slated to begin in the mid-2020s.
“The station will be a serious platform for future research,” said Komarov – concealing his seething Red ambition, though boasting “That is a rather significant contribution.”
Igor Lisov, editor at Space News, told AFP of Russia’s potential contribution: “We are offering carriers for flights to a lunar orbiting station, we are offering our docking units or their components,” he said, adding Russia had vast experience in creating life-support systems.
Unfortunately, this will be our doom…
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