Trump scores win with tax bill, but big questions remain about cost
Jonathon Gatehouse | CBC News | Posted: December 20, 2017 6:46 PM | Last Updated: December 20, 2017
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Trump wins, but at what cost?
After almost a year in power, Donald Trump finally has a major accomplishment to point to.
The U.S. Senate approved the biggest tax code overhaul in three decades shortly before 1 a.m. this morning, by a vote of 51 to 48. It will slash corporate tax rates from 35 to 21 per cent, reduce all sorts of deductions, and lower income taxes for 80 per cent of Americans — but with the lion's share of the savings going to the wealthy.
Today, the bill goes back to the House for another rubber stamp of approval. (Representatives had already passed it, but the Senate made some minor revisions, so they must vote again.)
To say that the process has been rushed is an understatement. The bill was crafted behind closed doors and legislators were given little time to read, let alone study, its almost 500 pages. Some sections were so last-minute that they were handwritten into initial copies.
And above all, no one is entirely certain of how much it will cost.
The working estimate, under Congressional scoring, is that it will add around $1.5 trillion US to America's already $20 trillion debt over the next decade. But the Committee for a Responsible Federal Budget, a conservative lobby group, puts the cost at $2.2 trillion plus interest, and it forecasts that America's debt will rise to between 98 and 100 per cent of GDP by 2027.
And even if many Americans stand to save some money, they don't seem all that enthused. Only 33 per cent of respondents to a recent CNN poll supported the bill, with 55 per cent against it. Another survey by Politico shows 42 per cent in favour verses 39 per cent opposed.
The White House is hoping to hold a celebratory event this afternoon, but it's unclear if the legislation will be ready for the President's signature by then.
And Trump will soon be jetting off to his Mar-a-Lago estate in Florida for the Christmas holidays.
Of course, this will spark another round of debate about how much the well-tanned President's love of sun and golf is actually costing taxpayers.
This rolling counter of his vacations claims $91 million. One figure that has been thrown around a lot — $3.6 million a day — has been called into question.
Newsweek estimated that his trip to Florida over U.S. Thanksgiving cost $1 million. That seems low, given that Air Force One costs $206,337 an hour to operate, putting the cost of a round-trip flight from Washington to Palm Beach alone at more than $800,000.
Then there's the golf cart rental bill for Trump's Secret Service protection, which is almost $150,000 since his inauguration.
It may take years to figure out. The true cost of Obama's vacations only became public late last month, in response to a series of freedom of information requests — $114 million over eight years.
Price fixing
A major Canadian grocery chain and related baker have admitted that they fixed bread prices for almost 14 years — and they won't be punished.
The mea-culpa from Loblaw Companies Ltd. and George Weston Ltd. came during a stock analyst conference call yesterday in which Galen Weston, the CEO of both companies, confirmed that they had been part of an industry-wide conspiracy that set the cost of some packaged baked goods from late 2001 until March 2015.
The companies received immunity in exchange for blowing the whistle on themselves and their competitors.
Canada has stiff penalties for price-fixing, with fines of up to $25 million and maximum jail terms of 14 years — or both.
They just don't get imposed as often as you might expect.
The Competition Bureau's 2016-17 annual update notes that courts levied $13.28 million in "cartel-related" fines last year, but $13 million of that came in a single case against Japanese auto parts maker Showa. (Another Japanese firm, Yazaki Corp., was fined $30 million in 2013 as part of the same investigation.)
And just one company was charged over the past fiscal year, the report says.
Last month, NGK Spark Plug Co. Ltd. pleaded guilty to one count of bid-rigging and was fined $550,000 by the Ontario Superior Court. That brought the grand total of related auto part fines to $84.7 million.
A gas-price fixing conspiracy in Quebec involving eight companies has resulted in $4 million in fines so far, and six people being sent to jail for a total of 54 months.
The bigger payouts now often come via settlements for the class-action lawsuits that get launched because of the price-fixing. For example, four of the Quebec gas companies spent $17 million to settle one class action earlier this year. (Another suit is still pending.)
Back in 2015, an eight-year investigation into chocolate price-fixing in Canada ended with all charges being dropped against executives from three firms. Cadbury Adams had tipped off the Competition Bureau to the scam in 2007, receiving immunity in exchange.
Loblaw's public restitution will come in the form of a $25 grocery gift card. Eligible customers can register online at LoblawCard.ca, starting Jan. 8.
The company expects that the "goodwill gesture" will cost it between $75 million and $150 million.
A bunga bunga comeback
Italy is set to bring down its 2018 budget later this week. And it looks like it will be the final act for the government of Prime Minister Paolo Gentiloni.
The president is set to dissolve parliament and a general election is expected in early March.
It's a contest that Silvio Berlusconi and his Forza Italia party are currently the odds-on favourites to win.
That would, of course, create some complications, as the controversial former prime minister is legally barred from holding elected office after a 2012 conviction for tax fraud. (He was sentenced to four years in jail, but ended up doing a few months of community service instead, in light of his advanced age.)
Berlusconi is appealing to the European Court of Human Rights to overturn the ban. However, there are signs that the 81-year-old media tycoon might be just as happy to meddle in the affairs of state from the sidelines.
In a late-November chat show appearance on Italian television, he floated Leonardo Gallitelli, a former general of the Carabinieri (the national military police), as a possible place-holder.
After leaving office amidst a sex scandal in 2011, Berlusconi kept a relatively low profile. These days, however, he seems to again be enjoying the spotlight, with what appears to be a new face and a fiancée 50 years his junior.
Forza Italia, which is part of a centre-right coalition with the Northern League and Brothers of Italy parties, had a resurgence in local elections this past June. It is tied with the anti-establishment Five Star movement atop the polls, albeit with a clearer path to victory.
Berlusconi spends much of his time these days giving interviews, and dumping on Forza's opponents in Trump-like tweet storms.
And although he continues to fight bribery charges related to his 2013 trial for paying underaged prostitutes for sex — he was initially convicted and sentenced to seven years in jail, then the verdict was overturned on appeal — Berlusconi still courts controversy.
With the #MeToo movement on the rise, he has been busy casting himself and his party as defenders of women. And in the fall, he took credit for educating Libya's late dictator Muammar Gaddafi about foreplay and the use of the bidet.
Meanwhile, the already wealthy Berlusconi is getting even richer — fast. A surge in the stock price of his Mediaset empire increased his fortune by 37 per cent — more than $2 billion US — over the past year. Bloomberg's new billionaires ranking estimates his net worth at $8.4 billion.
A comeback worthy of his now-permanent smile.
Quote of the moment
"The vacations accepted by Mr. Trudeau or his family could reasonably be seen to have been given to influence Mr. Trudeau in his capacity as prime minister."
- Federal Ethics Commissioner Mary Dawson, in a decision released today about the Prime Minister's 2016 Christmas trip to a private Caribbean island owned by the Aga Khan. Dawson says the family getaway violated some provisions of the Conflict of Interest Act.
What The National is reading
- France bans fossil fuel extraction in all of its territories. (Guardian)
- U.S. Coast Guard frees sea turtle trapped in floating cocaine bales. (NBC News)
- Newfoundland premier provided key info to ID murder suspect. (CBC)
- China's appetite for lithium on display in Canadian takeover. (Financial Post)
- Man who tried to storm U.S. air base in the U.K. had a teddy bear strapped to his chest. (The Times)
- A critical analysis of Bob Dylan's 2017 Christmas lights. (Vice)
Today in history
Dec. 20, 1985: Electric eels light up Christmas tree.
Staff at the Vancouver Aquarium carry on the festive tradition of wiring the Christmas tree up to the old eel tank. Just like Grandpa used to — until he met a shocking end...