Jan 9, 2018

Tax plan might create more competition with foreign manufacturers

Employees operate sewing machines at a garment factory in Kolkata. Photo: Taylor Weidman / Bloomberg via Getty Images

The new tax law "could actually make it attractive for companies to put more assembly lines on foreign soil," according to the N.Y. Times ("New Tax Law, Billed as Boon To U.S. Plants, Could Backfire"):

Why it matters: "The Republican vision for the tax plan was to make the United States a more competitive place to do business."

  • "Under the new law, income made by American companies’ overseas subsidiaries will face United States taxes that are half the rate applied to their domestic income, 10.5 percent compared with the new top corporate rate of 21 percent."
  • "What could be more dangerous for American workers, economists said, is that the bill ends up creating a tax break for manufacturers with foreign operations. ... [C]ompanies will not have to pay United States taxes on the money they earn from plants or equipment located abroad, if those earnings amount to 10 percent or less of the total investment."
  • The counter-argument: "Supporters contend that the new rules do not encourage companies to locate overseas. Rather, they say, slashing the corporate rate will make it more attractive to set up shop at home, since many other advanced economies now have higher taxes."

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Coronavirus dashboard

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  1. Global: Total confirmed cases as of 3 p.m. ET: 766,336 — Total deaths: 36,873 — Total recoveries: 160,001.
  2. U.S.: Leads the world in confirmed cases. Total confirmed cases as of 3 p.m. ET: 153,246 — Total deaths: 2,828 — Total recoveries: 5,545.
  3. Federal government latest: The White House will extend its social distancing guidelines until April 30 — Rep. Nydia Velázquez diagnosed with "presumed" coronavirus infection.
  4. State updates: Virginia and Maryland issued stay-at-home orders to residents, joining 28 other states — Florida megachurch pastor arrested for refusing to call off mass services.
  5. World updates: Italy reports 1,590 recoveries from the virus, its highest ever.
  6. In photos: Navy hospital ship arrives in Manhattan
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Cuomo: Engaging in politics during coronavirus crisis is "anti-American"

New York Gov. Andrew Cuomo said during a Monday press briefing that he won't get into a political tussle with President Trump — calling it "counterproductive" and "anti-American" — as his state deals with the most confirmed coronavirus cases in the country.

The backdrop: Trump said during an appearance on "Fox & Friends" earlier Monday that Cuomo has received high polling numbers during the outbreak because New York has received federal aid.

Maryland and Virginia issue coronavirus stay-at-home orders

Data: Axios reporting; Map: Danielle Alberti/Axios

Maryland Gov. Larry Hogan and Virginia Gov. Ralph Northam issued stay-at-home orders on Monday, with exceptions for residents engaged in essential services, including health care and government functions.

The big picture: The states are the latest to announce policies to enforce social distancing, which have affected almost 250 million Americans. More than 1.5 billion people worldwide had been asked to stay home as of last week.

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