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Democrats debate if ‘billionaires tax’ can pay for Biden’s sweeping agenda

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The chairman of the powerful U.S. Senate Finance Committee on Wednesday outlined the terms of a Democratic proposal to tax billionaires’ assets to help finance President Joe Biden’s social-policy and climate-change agenda.

But it was unclear whether there was enough Democratic support to pass the proposal presented by Chairman Ron Wyden or a proposed 15% corporate minimum tax https://www.reuters.com/world/us/details-emerge-corporate-minimum-tax-plan-us-senate-democrats-cnbc-2021-10-26 on the most profitable U.S. corporations.

Those two ideas, as well as tougher tax enforcement, are among the mechanisms Biden’s Democrats are considering to fund a pair of bills together worth about $3 trillion to rebuild the nation’s infrastructure, boost social spending and fight climate change. The party is struggling to reach consensus on both the scope of the bills and how to pay for them.

Wyden and other lawmakers, including Democratic Senator Elizabeth Warren, say the tax legislation is intended to curtail tax avoidance by corporations and the wealthy and could generate hundreds of billions of dollars to pay for Biden’s plan.

Aides in Congress said the billionaires tax, affecting roughly 700 taxpayers with over $1 billion in assets or $100 million in annual income for three consecutive years, would impose a 23.8% tax rate for long-term capital gains on tradable assets, whether or not they have been sold. It would also allow taxpayers to take deductions for losses on assets.

The tax on billionaires faces potential opposition from other Democrats who favor Biden’s original proposal, which would raise tax rates on companies and the wealthy but also faces an uphill fight in the Senate.

Senator Bernie Sanders, a leading progressive, said the billionaires tax was a “step in the right direction” but not nearly enough.

“Every sensible revenue option seems to be destroyed,” he told reporters.

Democrats need to keep all of their members in line for legislation to pass the Senate, which is split evenly between Democrats and Republicans.

MANCHIN SKEPTICAL

Democratic Senator Joe Manchin, a centrist who has forced Biden to scale back the spending package, reacted with skepticism to the billionaires tax proposal.

“I don’t like the connotation that we are targeting different people,” he told reporters.

Manchin said he would support a minimum 15% tax on wealthy individuals, similar to the 15% corporate minimum tax that Democrats have proposed.

The minimum corporate tax would dovetail with a global corporate minimum tax recently agreed to by 136 countries https://www.reuters.com/business/finance/us-treasurys-yellen-confident-congress-will-pass-global-minimum-tax-2021-10-10 and aimed at corporations that pay little or no tax by gaming the international tax system.

It would apply to many large American companies, such as Apple Inc, Amazon.com Inc, JPMorgan Chase & Co and Johnson & Johnson Inc.

The debate, and other divisions among Democrats about the scope of Biden’s plans, looked likely to derail the party’s hopes of passing major legislation this month – to the dismay of Biden, who hoped to land a legislative victory on climate change before starting a trip abroad on Thursday that includes an international conference on the matter.

Some experts say the billionaires tax could be difficult to enforce.

“Government staffers tend to be outmatched by the most sophisticated, best-resourced taxpayers out there,” said Steve Rosenthal, a senior fellow at the Tax Policy Center, a Washington think tank.

Tesla Inc Chief Executive Elon Musk blasted the plan on Twitter.

“Eventually they run out of other people’s money and then they come for you,” said Musk, who early this week was worth https://www.reuters.com/business/autos-transportation/teslas-1-trillion-value-double-bonanza-musk-2021-10-25 about $230 billion, according to Refinitiv. “Who is best at capital allocation — government or entrepreneurs — is indeed what it comes down to.”

Not all billionaires are opposed to the plan. George Soros, the investor and liberal activist, is “supportive https://www.reuters.com/world/us/us-billionaire-tax-proposal-seems-unite-democrats-will-it-work-2021-10-26,” his spokesperson told Reuters on Monday.

(Reporting by Richard Cowan and David Morgan; Additional reporting by David Lawder, Tim Ahmann and Christopher Gallagher; writing by Andy Sullivan; Editing by Scott Malone, Mark Porter and Howard Goller)

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Extremist Politics Threatens Chile's Economic Miracle – Bloomberg

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Chile has for decades been Latin America’s most stable nation and one of its most prosperous. Its pro-business outlook has drawn foreign direct investment and fueled economic growth, and its record in reducing poverty has been impressive. Much of that is now thrown into question. After the recent first round of elections, the two front-runners for the presidency are extremists — an ultraconservative who seems nostalgic for the dictatorial rule of Augusto Pinochet, and a leftist who promises not merely to reform but to dismantle Chile’s economic model. It’s hard to say which of these agendas might prove more toxic.

The candidate of the far right, José Antonio Kast, emerged with a narrow lead heading into the runoff vote on Dec. 19. His platform is thin on economics and heavy on social conservatism and authoritarian messaging. His counterpart on the left, Gabriel Boric, promises radical change to combat inequality, rein in capitalism and dethrone market forces. “If Chile was the birthplace of neoliberalism,” he explains, “it will also be its grave.”

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Now, more than ever, the N.W.T. government needs party politics – CBC.ca

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This column is an opinion by former Yellowknife MLA Kieron Testart. For more information about CBC’s Opinion section, please see the FAQ.

In 2019 near the end of my term as an MLA, I proposed implementing a caucus system that, among other things, would allow for political discipline of MLAs. At the time MLAs rejected any changes that would limit their jealously-guarded independence. What they failed to recognize was that this proposal was not about imposing discipline, rather it was about enabling politicians to effectively discipline MLAs when required. 

The Norn affair and the pronounced lack of any real accountability in the legislature over the government’s failings are the consequences of being governed by a gang of loosely aligned political independents who lack common vision and leadership.

This point was made by MLA Rylund Johnson who said, “In party systems, the party whip would probably make sure this never happens. Party caucuses would kick members out and make them irrelevant …Those aren’t tools that we have in consensus government.”

The consensus system is based on little more than good intentions and is powerless to address its own failings, with MLAs routinely using their constituents as a convenient smoke screen for their own bad behaviour. 

Sound familiar? It should, it happens all the time with the recent example of Steve Norn being the most spectacular failure of political will to date in the 19th Assembly.

Norn’s sustained attacks on his colleagues and the legislature were left virtually unchecked by MLAs, who stood by silently. Public confidence in elected officials has been shaken to the point that two former premiers have taken the extraordinary step of publicly criticizing sitting MLAs. Scandal and policy failures have become the chief commodity of the Legislative Assembly and Caroline Cochrane’s government.

While other provinces acted swiftly with new spending and policies to bolster their economies and attract new health-care workers, the Cochrane government has wrung its hands, paralyzed by bureaucratic inertia. We have watched in real time as our health-care system has buckled and broken under the strain of the pandemic, with no plan yet released for economic recovery after months and months of delay. And despite the outcry from Northerners for their government to act, the “unofficial opposition” of regular MLAs is absent, or at least silent, unable to muster the courage and unify to demand better government from the cabinet. 

In the Northwest Territories the people have a choice in who gets to take power but not in how that power is used, nor can they hold the powerful accountable during elections. MLAs appoint the premier and cabinet, who are solely accountable to each other. This means that voters have no say over who forms government or what that government does for its four-year term and cannot hold that government accountable for its decisions. This leaves accountability in the hands of an undisciplined committee of regular MLAs who lack resources, staff, and experience to provide alternatives to cabinet policies. Public policy development and implementation are the sole domain of unelected bureaucrats in the government’s senior management.

Despite the constant mythologizing of consensus government as a superior form of government, founded in the traditions of Indigenous Peoples, the fact is none of the N.W.T.’s self-governing Indigenous nations use consensus systems, nor did Indigenous people design the system when it was first implemented decades ago. That honour falls to federal bureaucrats when they devolved responsible government to our young territory. Despite their frustration, Northerners continue to consent to an undemocratic democracy where their electoral choices have been reduced to little more than an overblown hiring competition. 

A culture of silence has taken root in the N.W.T.’s democratic discourse. The fear of reprisal from those in power forces many to whisper in the back of coffee shops and speak anonymously to reporters, when they ought to be able to freely express their own views and see those views transformed into political action.

There was a time that the consensus system served Northerners well. But that time has passed, made clear by persistent scandal and public policy implosions that have not stopped since the last election. We’ve seen devolution create a modern N.W.T. granted nearly full responsibility over its land and resources. It is now time for evolution to transform our political system into a modern multi-party democracy that can provide unity and real action on the most pressing issues.

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Italy, France to deepen ties as Merkel’s exit tests European diplomacy

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The leaders of Italy and France will sign a treaty on Friday to strengthen bilateral ties at a time when European diplomacy is being tested by the departure of German Chancellor Angela Merkel.

The Quirinale Treaty is aimed at enhancing cooperation between Paris and Rome in areas including defence, migration, the economy, culture and trade.

The signing ceremony comes shortly after a new coalition pact was agreed in Germany, ending 16 years of rule by Merkel, who was the undisputed leader of Europe and forged especially close ties with successive French leaders.

The new Berlin administration is expected to be more inward looking, especially at the start of its mandate, and both Paris and Rome are keen to deepen relations in a period clouded by economic uncertainty, the pandemic, a more assertive Russia, a rising China and a more disengaged United States.

“Macron’s intention is to create a new axis with Italy, while it is in Italy’s interest to hook up with the France-Germany duo,” said a senior Italian diplomatic source, who declined to be named.

RENAISSANCE

Originally envisaged in 2017, negotiations on the new treaty ground to a halt in 2018 when a populist government took office in Rome and clashed with Macron over immigration.

Relations hit a low in 2019 when Macron briefly recalled France’s ambassador to Italy, but there has been a renaissance this year following the appointment of former European Central Bank chief Mario Draghi to lead an Italian unity government.

A French diplomatic source rejected suggestions that the new axis between the European Union’s second and third largest economies represented any re-alignment of Paris’s diplomatic priorities.

“We have never played a jealousy triangle with European partners. These bilateral relations, when they are strong … complement each other,” the source said.

The Quirinale Treaty, named after the Italian president’s residence and loosely modelled on a 1963 Franco-German pact, is expected to lead to Paris and Rome seeking common ground ahead of EU summits, just as France already coordinates key European policy moves with Germany.

Full details of the pact have not been released but there will be special interest in sections covering economic ties and cooperation in strategic sectors.

French companies have invested heavily in Italy in recent years, but Italian politicians have accused Paris of being less forthcoming when Italian businesses seek cross-border deals.

Earlier this year, state-owned shipmaker Fincantieri’s bid to take over its French peer Chantiers de l’Atlantique collapsed, thwarted by EU competition issues.

Italian officials suspected Paris actively sought to undermine the deal behind the scenes.

 

(Editing by Gareth Jones)

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