Trump’s new capital gains tax cut spurs Dems again

President Trump and Treasury Secretary Steven Mnuchin floated the idea of a $100B tax cut for Americans through a new capital gains tax change.

The administration is looking at indexing capital gains to inflation. Meaning if you bought an asset for $200,000 in 2001 and sold it in 2018 for $2 million the tax owed would be $1.8 million. When you account for inflation the $200K is $600K so the taxable profit would be  $1.4 million versus $2 million.

While the New York Times says this is targeted to the wealthy, this is true however capital gains taxes do reach down to what’s left of the middle class setting up their retirement.

Given the run up in the stock markets over the last 20 years, there are many in the middle class that could fall into this category.

But of course the Times went with a class-warfare angle to the story, suggesting that its a give back exclusively for the rich. Just like the prior middle-class tax cut, this move, which may attempt to bypass the need for Congressional action, are parts of Trump’s campaign pledge to put more of the people’s resources back in their hands.

Of course the Anti-Trump forces are already out in force screaming about growing deficits as if they have nothing to do with record US debt levels.

“At a time when the deficit is out of control, wages are flat and the wealthiest are doing better than ever, to give the top 1 percent another advantage is an outrage and shows the Republicans’ true colors,” said Senator Chuck Schumer of New York, the Democratic leader. “Furthermore, Mr. Mnuchin thinks he can do it on his own, but everyone knows this must be done by legislation.”

The rollback of the economic philosophy that the few will pay for the many of the last administration, along with the changing of trade policies to put Americans first will be two of Trump’s major milestones.

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Trump’s trade talks are simple, if you want a strong US

As I wrote in the late spring when the tariff war talk started, this is truly the art of the deal for President Trump.

By the actions of numerous previous administrations, the world and China particularly, took on the task of being our manufacturing base for better or worse.

So Trump said if they have to sell to us, which they do, then we need to get better terms. A business mentality, not a pie-in-the-sky globalist view of trade.

Look no further than the deal Trump has worked out with the EU. Trump told EC president Jean-Claude Juncker, if you want Mercedes and BMWs in our driveways, then you have to give us this and this. Leveling the playing field had to win the day, the Germans had too much riding on staying competitive with their cars.

Look at China as the perfect example. Since the initial $50 billion in tariffs was floated, its stock market has tanked and its currency, the yuan, has cratered to a 13-month low. This despite the yuan being pegged to the US dollar, which has not moved that much over the same time frame.

China has far too much invested in migrating its people from the countryside to the cities to create its nascent middle class of manufacturing workers to walk away from US trade.

Is Foxconn going to sell knockoff iPhones to Nokia?

To be honest it’s not even a fair negotiation on these tariff talks. Oh, sure China and the EU can be boastful and full of bluster about Trump’s tactics, but at the end of the day these products need to be here or else those widgets have no other natural market on the scale of the US.

Anyone of the last five presidents could have done this deal if they wanted to, but that’s the problem, they didn’t. They were beholden to globalist espousing one world government and currency.

So if you come at trade from an America First point of view, you get the best terms possible, like the EU paying us to ship their cars to the US, which is essentially what this new deal is because they took tariffs off our exports to the continent.

It’s really easy to get your terms when you acknowledge that there are borders to countries and they are there for a reason and we will defend ours both economically and militarily.

China has seen that and right after Labor Day it will capitulate to our terms in order to feed their people over the winter. Trust me on this, as Trump  says.

US can’t afford peace with Russia

With hundreds of trillions of dollars on the line, the US media is beating the drum on the 70-year-old plus Russia is bad narrative.

The entire military-industrial complex was built on that premise that we had to go toe-to-toe with Russia on every aircraft, tank and nuclear missile — even if the East did not have that weapon.

What will happen if the Bogey Man is not so bad after all.

Now along comes President Trump to stick a pin in that idea and it unleashes forces from the left and right beholden to escalating defense budgets and growing military bases in their districts.

Peace is too costly to break out across the US visa vis Russia. We need that 70-year-old premise that NATO and containment are what the world needs.

Of course Trump will survive the onslaught of criticism, however threatening to take the milk and honey away from the defense contractors and intelligence agencies is quite another matter.

It was JFK who threatened to break up the intelligence agencies –most notably the CIA — into pieces in 1963 that may have played a part in his assassination.

Let’s hope nothing untoward happens again.

JPM’s Dimon eyeing Deutsche with Chinese cash

Is Jamie Dimon looking to goose-step into Frankfurt and take over troubled Deutsche Bank using Chinese money?

That appears to be to the story coming out of Germany as Deutsche’s stock spikes more than 6% in European trading on the news.

JPMorgan and Industrial and Commercial Bank of China are looking to take a stake — size unknown –to bolster the troubled bank, the report from the business weekly WirtschaftsWoche said.

WIWO also reported that German Chancellor Angela Merkel had met Axel Weber, the former Bundesbank head who is now chairman of Swiss bank UBS, to discuss his thoughts on Deutsche Bank.

Newly installed CEO Christian Sewing has not given the market any confidence in his ability to turn around the much maligned institution, which has paid nearly $500 billion in penalties and fines to global regulators for its bad banking actions over the last decade.

Sewing is also seen as an impediment to change since he made his bones at the bank during this troubling time as I have written before.

Before the summer ends something will happen with Deutsche Bank. Whether that’s a merger with fellow-troubled German firm Commerzbank or a bailout through cash injections from EU this bank right now is on the ropes and getting pummelled.

Tariffs and the Art of the deal German-style

As I wrote last week this is more of a tariff tiff than a war.

You announce a number — $50B, $200B in tariffs — it doesn’t matter. It’s just a number to begin negotiations.

Wednesday morning news broke that the German ambassador was about to announce that the EU would abandon all import tariffs for cars between the European Union and the US provided the Trump Administration drop its 25% border tax on all EU car imports.

See its all negotiations and never really gets implemented. It’s the Art of the Deal so to speak. Finally, America has someone who does not bow to pressure from other countries that have enjoyed decades of favorable treatment selling into the US market.

This has everything and nothing to do with President Trump. Presidents Obama, Bush, Clinton, Bush could have done this. They couldn’t because they took the money of the multi-national corporations and the globalist free traders who demanded that the US come out on the losing end of most trade deals as a way to pay back for our other sins.

Enter Trump. No ties that bind to these factions. Knows a thing or two about negotiations and plays hardball with them. As I wrote earlier, do you think any country would forgo its ability to sell into the US over tariffs or import taxes?

Of course not. I think I hear China working the abacus to figure out its new proposal right now.