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Politics this week | The world this week – The Economist

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The WHO said that most new cases of covid-19, a novel type of coronavirus, are now being reported outside China. The number of cases surged in South Korea; Italy recorded hundreds of infections, more than in any country outside Asia; and there were worries that Iran was underreporting the spread of the epidemic within its borders. Iran’s deputy health minister tested positive for the disease. See article.

China postponed the annual sessions of its rubber-stamp parliament because of concerns about the outbreak of covid-19. The meetings had been due to start in Beijing in March and involve thousands of delegates. Despite a fall in the daily numbers of new cases in China, Xi Jinping, the president, said the epidemic was “still grim and complex”.

A Chinese court sentenced Gui Minhai, the co-owner of a bookshop in Hong Kong that sold gossipy works about China’s leaders, to ten years in prison for “illegally providing intelligence overseas”. Mr Gui is a Swedish citizen who is also claimed by China as its national. His detention has fuelled widespread alarm in Hong Kong about the erosion of political freedoms.

Mahathir Mohamad resigned as prime minister of Malaysia, after his own party, Bersatu, decided to leave the ruling coalition. He remains in office as a caretaker. Anwar Ibrahim, his long-time rival and leader of Parti Keadilan Rakyat, the biggest party in the coalition, has put himself forward as a replacement. It is unclear whether either man has the support of most MPs. See article.

The Afghan army, the insurgents of the Taliban and NATO forces all pledged to observe a week-long “reduction in violence” in Afghanistan’s civil war. If it holds until February 28th, America and the Taliban will sign a peace deal in Qatar on February 29th. See article.

Thailand’s constitutional court disbanded Future Forward, the country’s third-biggest political party, and banned its leaders from politics. It is the eighth party the court has dissolved since 2006. See article.

Narendra Modi, the prime minister of India, summoned a crowd of hundreds of thousands to cheer for Donald Trump. But the American president’s visit was marred by communal riots in Delhi, which claimed 33 lives. See article.

Taur Matan Ruak, the prime minister of East Timor, resigned after parliament voted down his budget. The president must now decide whether to name another prime minister or call elections.

Foreign policymaking

Boris Johnson, Britain’s prime minister, announced a wide-ranging review of the country’s place in the world post-Brexit that seeks “innovative ways” to push overseas interests. Outside experts will be used to challenge “traditional Whitehall assumptions”, a nod to Dominic Cummings, Mr Johnson’s powerful special adviser, who has clashed with civil servants. Mr Cummings has criticised waste in the Ministry of Defence.

Sajid Javid, who resigned as Britain’s chancellor of the exchequer after a skirmish with Mr Cummings, attacked a move to align the Treasury more closely with thinking in the prime minister’s office. Mr Javid said that this was not in the national interest.

The race to be the next leader of Germany’s ruling Christian Democrats, and probable chancellor after Angela Merkel quits next year, now has only three runners. Armin Laschet, the premier of North Rhine-Westphalia, got a big boost when Jens Spahn, the up-and-coming federal health minister, said he would not contest the race, but would support him instead.

Residents of the Greek islands of Lesbos and Chios fought with riot police in an attempt to stop an expansion of detention camps to house more migrants arriving mostly from the Middle East via Turkey.

Degrees of brutality

Hosni Mubarak, who ruled Egypt for three decades, died. The former despot was toppled during the Arab spring of 2011, amid protests over poverty and his repressive rule. He faced trial for corruption and murder, but mostly avoided punishment. Many Egyptians expressed nostalgia for Mr Mubarak, who ruled with a lighter touch than the current dictator, Abdel-Fattah al-Sisi. See article.

Hardliners won parliamentary elections in Iran, scooping three-quarters of the seats. The regime claimed a mandate for its confrontational stance towards America. But thousands of moderates and reformers were barred from running and, as a result, turnout was the lowest in a parliamentary election since the Islamic revolution in 1979. See article.

Faure Gnassingbé, the president of Togo, won another term in an election marred by irregularities. Mr Gnassingbé has been in office since 2005, when he took over from his father, who had first seized power in 1967.

The police in a state

A strike by police in Ceará, in north-eastern Brazil, led to a sharp rise in the number of murders in the state. At least 170 people have died since police stopped work on February 19th in a row over pay. A senator, Cid Gomes, was shot as he drove a digger towards striking police. The government has sent in the army.

Protests by police in Haiti against poor working conditions led to battles between them and the army. At least one soldier died. The country’s Carnival celebration was cancelled.

Bolivia’s Supreme Electoral Tribunal barred Evo Morales, a former president, from running for a seat in the Senate in elections due in May. Mr Morales left office in November after Bolivians protested against his re-election.

Her day in court

Harvey Weinstein was found guilty of two of the charges brought against him in New York: of rape (by having sex with a woman against her will) and of forcing oral sex on a woman. He was acquitted of three charges, including the most serious. Scores of other women have accused him of sexual misconduct. See article.

The latest Democratic debate produced the usual fireworks. It was the last to be held before the South Carolina primary and Super Tuesday, when Democrats in 14 states will vote on who they want to be their presidential candidate. Bernie Sanders remains the firm favourite following his decisive win in Nevada. See article.

Meanwhile, it was reported that Russia is meddling in the primaries to get Mr Sanders elected, and is also stepping up plans to interfere in the general election to re-elect Donald Trump. So it is a win-win situation for the Kremlin if either Mr Sanders or Mr Trump is victorious in November. See article.

This article appeared in the The world this week section of the print edition under the headline “Politics this week”

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Pakistan politics based on element of vindictiveness; Imran latest victim – Business Standard

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in is based on an element of vindictiveness which often tends to make the creator or supporter of a particular law, victim of his own doing. This vicious political cycle has affected the lives and careers of several prominent politicians in the country and would now come to haunt former Prime Minister .

The accusations against Khan in the Toshakhana case is far more complex than it appears and is a matter of serious concern for the former premier. While on the face of it, the case might not appear as part of a major corruption scandal involving embezzlement of crores of state funds, it nevertheless hinges on a principle stand adopted by the Supreme Court on need for earnings to be declared by politicians, including Prime Ministers.

In the case of Nawaz Sharif, the Supreme Court had disqualified him from participating in national for life, which also became the basis for his removal from the post of Prime Minister. In the Sharif case, the accusation against him was for having not declared a certain amount which he was to have received (but had not yet received) from certain sources. The initial part of the Supreme Court declaration in the case had mentioned: “It is hereby declared that having failed to disclose his unwithdrawn receivables constituting assets from XYZ sources in his nomination papers filed for general elections held in 2013, Sharif remains disqualified from being member of Parliament as per Article 62(1)F of the Constitution.”

It is worth noting that in the Nawaz Sharif case, even though he had not received the said amount, the fact that he was due to receive the amount, and had consciously avoided declaring the same in the statement of returns before the Election Commission, led the Supreme Court to come up with, what many members of the Pakistani legal fraternity considered as, a ‘controversial’ and ‘harsh’ decision. However, the fact remains that the decision was implemented and Nawaz Sharif was removed from position. Members of the PTI and PML-Q celebrated the occasion appreciating the decision of the Supreme Court.

According to reports, Khan had earned around 36 million PKR by illegally selling three watches gifted to him by foreign dignitaries to a local watch dealer. Apparently, Khan during his tenure as prime minister earned millions of rupees from these jewel-class watches collectively worth over 154 million PKR. The watches were gifted to him by foreign leaders. The most expensive watch, of more than 101 million PKR value, was apparently retained by Khan at 20 per cent of its value after his government amended the Toshakhana rules and settled the gift retention price at 50 per cent (not 20 per cent) of its original value. Moreover, he did so without ever declaring the gifts to the Election Commission and getting them evaluated.

If Nawaz Sharif was considered ‘dishonest’ by the Supreme Court for not declaring an amount he had not received, in the case of Khan his having received a certain amount from the sale of gifts received by him during his foreign tours and not declaring the same, poses an ever more serious threat to Khan. The precedence thus set by the Supreme Court would be a challenge to Khan to deal with. The more sinister aspect of the Khan case is that on receiving the costly gifts, he failed to declare them to the Toshakhana and retained them with him before disposing them.

Khan had received most of the gifts in 2018 during his foreign travels and should have ideally declared these in the 2019 statement of returns. Likewise, he did not declare the gifts received in 2019 in the 2020 statement of returns, thus committing a serious act of “dishonesty” towards the nation and the people of .

Even though the Supreme Court decision against Nawaz Sharif was considered ‘drastic’ and ‘unusual’ and was criticised by the legal fraternity and political analysts, the fact remains that the Supreme Court decision has become a precedence and remains in place. Moreover, considering Nawaz Sharif had to give up the post of Prime Minister and has been banned for life from participating in elections, based on this decision of the Supreme Court, there is no reason why the same norms would not apply in the case of Khan.

The Sharif brothers would ensure that Khan is not spared on this count even though Khan would try to exploit his support base in the public domain to create strong opposition against the decision. The situation undoubtedly looks bleak for Khan as his fate now remains in the hands of the judiciary and the establishment.

–IANS

ksk/

 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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Politics Trump Policy – AAF – American Action Forum

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It is done. The Senate has passed the Inflation Reduction Act (IRA) using reconciliation procedures. Outside of the political imperative to “get something done,” there is little in the IRA to commend. It won’t reduce inflation. As a stand-alone, the health provisions are incoherent. And “historic” investment in combatting climate change is part of a larger strategy that never made sense, is chump change compared to the cost of the problem, and has been badly warped by the administration’s fealty to unionization efforts. It’s all bad enough.

That includes the tax policy – especially the book minimum tax. The basic idea was that a large firm ($1 billion in financial income) would pay the greater of 21 percent of its taxable income or 15 percent of the income reported in financial statements (book income). This was never a good idea.

It was tried in 1986 and eliminated in 1989. It was too complex to administer and comply with – nothing has improved on either front with the passage of time. It provided an incentive to distort the financial reporting for tax purposes; why would the United States want to do a U-turn on the progress made on this front in the aftermath of the Enron and Worldcom scandals? It also punished the wrong firms. The only legal way to get the effective rate down is to take advantage of things that Congress itself wrote into the tax code – accelerated depreciation and expensing, research and development tax credits, and so forth. Even advocates of the IRA acknowledged this was not good policy. It was softened to acknowledge depreciation deductions to reduce the hit on manufacturers and defended on the grounds that it would affect only 100 to 200 firms.

The Senate even tried to make it worse. On Saturday when the legislative text for the tax provisions was finally, and for the first time, made public, it contained a huge “gotcha.” Suppose that there were four firms, each with $300 million in book income, each of which had as a common majority investor an investment fund like a private equity. Under the IRA, these four firms would be deemed a $1.2 billion single firm, and subject to the 15 percent book tax.

This would have increased the number of affected firms dramatically, perhaps by as many as 15,000 to 20,000. But more important, it would have distorted much more economic activity and raised the headwinds to growth considerably. Fortunately, the provision was dropped during the debate, limiting the impact of the book tax.

In sum, the IRA won’t reduce inflation, is anti-growth, assaults innovation in the biopharma sector of the economy, and its climate provisions are poorly designed and puny relative to problem. As years pass, the IRA will appear less and less appealing. There may be political celebrating, but it is not a policy win.

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Senate passes Democrats' sweeping health care and climate bill – CNN

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(CNN)The Senate on Sunday afternoon passed Democrats’ $750 billion health care, tax and climate bill, in a significant victory for President Joe Biden and his party.

The final, party-line vote was 51-50, with Vice President Kamala Harris breaking the tie. The package is the product of painstaking negotiations, and its final passage would give Democrats a chance to achieve major policy objectives ahead of the upcoming midterm elections.
The Democrat-controlled House, which is expected to take up the legislation on Friday, August 12, must approve the bill before Biden can sign it into law.
The sweeping bill — named the Inflation Reduction Act — would represent the largest climate investment in US history and make major changes to health policy by giving Medicare the power for the first time to negotiate the prices of certain prescription drugs and extending expiring health care subsidies for three years. The legislation would reduce the deficit, be paid for through new taxes — including a 15% minimum tax on large corporations and a 1% tax on stock buybacks — and boost the Internal Revenue Service’s ability to collect.
It would raise over $700 billion in government revenue over 10 years and spend over $430 billion to reduce carbon emissions and extend subsidies for health insurance under the Affordable Care Act and use the rest of the new revenue to reduce the deficit.
Senate Democrats, with a narrow 50-seat majority, stayed unified to pass the legislation, using a special, filibuster-proof process to approve the measure without Republican votes. Final passage came after a marathon series of contentious amendment votes known as a “vote-a-rama” that stretched nearly 16 hours from late Saturday night until Sunday afternoon.
West Virginia Democratic Sen. Joe Manchin told CNN that the legislation he helped write is “a good balanced bill.”
“I think we’ll all benefit from it; the country will,” Manchin told CNN. “We have energy security, that’s what we were looking for. And we have the ability to invest in the energy of the future.”
Biden praised the Senate for passing the bill in a statement Sunday, thanking Democrats in the chamber and touting the legislation’s climate investments and health care provisions.
“Today, Senate Democrats sided with American families over special interests, voting to lower the cost of prescription drugs, health insurance, and everyday energy costs and reduce the deficit, while making the wealthiest corporations finally pay their fair share,” Biden said.

How Senate Democrats passed the bill on a party-line vote

Senate Democrats have long hoped to pass a signature legislative package that would incorporate major agenda items for the party, but struggled for months to reach a deal that gained full support of their caucus.
Manchin played a key role in shaping the legislation — which only moved forward after the West Virginia Democrat and Senate Majority Leader Chuck Schumer announced a deal at the end of July, a major breakthrough for Democrats after earlier negotiations had stalled out.
Arizona Sen. Kyrsten Sinema on Thursday night offered critical support after party leaders agreed to change new tax proposals, indicating she would “move forward” on the sweeping economic package.
But Sinema, Manchin and other senators worked through the weekend making crucial alterations on the bill.
To avoid a last-minute collapse of the bill on Sunday, Democrats created a plan to win over Sinema, who was concerned over the 15% corporate minimum tax’s impact on subsidiaries owned by private equity. Senate Democrats accepted a narrower tax proposal, but instead of paying for it through a change to the state and local tax (SALT) deduction, as Senate GOP Whip John Thune of South Dakota suggested, they instead extended the limitation on the amount of losses that businesses can deduct for another two years.
The change was intended to prevent House Democrats primarily from coastal districts, who have campaigned on repealing limits on the SALT deduction, from breaking from the bill, when they vote on it later this week.
After the bill’s passage in the Senate, Sinema said in a statement it would “help Arizonans build better lives for themselves and their families by lowering prices, making health care more affordable and accessible, and securing Arizona’s water and energy future,” while also “boosting innovation and spurring job creation.”
In a good sign for the bill becoming law, key House Democrats signaled later Sunday that they’ll vote for it despite previous demands over SALT.
Rep. Josh Gottheimer of New Jersey had been part of the “No SALT, no deal” caucus. But he said the bill passes his test because it doesn’t raise individual income tax rates.
Rep. Mikie Sherrill of New Jersey, another member of that caucus, echoed his sentiment: “I will also remain steadfast in my commitment to ensuring that any discussion of reforms to the 2017 tax law begins with addressing SALT. Because this legislation does not raise taxes on families in my district, but in fact significantly lowers their costs, I will be voting for it.”
Republicans used the weekend “vote-a-rama” to put Democrats on the spot and force politically tough votes. They were also successful in removing a key insulin provision to cap the price of insulin to $35 per month on the private insurance market, which the Senate parliamentarian ruled was not compliant with the Senate’s reconciliation rules. The $35 insulin cap for Medicare beneficiaries remains in place.
Senate Minority Leader Mitch McConnell said in a statement that the bill included “giant job-killing tax hikes” and amounted to “a war on American fossil fuel.” The Kentucky Republican said Democrats “do not care about middle-class families’ priorities.”
“And their response to the runaway inflation they’ve created is a bill that experts say will not meaningfully cut inflation at all,” said McConnell. “The American people are clear about their priorities. Environmental regulation is a 3% issue. Americans want solutions for inflation, crime, and the border.”

How the bill addresses the climate crisis

While economists disagree over whether the package would, in fact, live up to its name and reduce inflation, particularly in the short term, the bill would have a crucial impact on reducing carbon emissions.
The nearly $370 billion clean energy and climate package is the largest climate investment in US history, and the biggest victory for the environmental movement since the landmark Clean Air Act. It also comes at a critical time; this summer has seen punishing heat waves and deadly floods across the country, which scientists say are both linked to a warming planet.
Analysis from Senate Majority Leader Chuck Schumer’s office — as well as multiple independent analyses — suggests the measure would reduce US carbon emissions by up to 40% by 2030. Strong climate regulations from the Biden administration and action from states would be needed to get to President Joe Biden’s goal of cutting emissions 50% by 2030.
The bill also contains many tax incentives meant to bring down the cost of electricity with more renewables, and spur more American consumers to switch to electricity to power their homes and vehicles.
Lawmakers said the bill represents a monumental victory and is also just the start of what’s needed to combat the climate crisis.
“This isn’t about the laws of politics, this is about the laws of physics,” Democratic Sen. Brian Schatz of Hawaii told CNN. “We all knew coming into this effort that we had to do what the science tells us what we need to do.”

Key health care and tax policy in the bill

The bill would empower Medicare to negotiate prices of certain costly medications administered in doctors’ offices or purchased at the pharmacy. The Health and Human Services secretary would negotiate the prices of 10 drugs in 2026, and another 15 drugs in 2027 and again in 2028. The number would rise to 20 drugs a year for 2029 and beyond.
This controversial provision is far more limited than the one House Democratic leaders have backed in the past. But it would open the door to fulfilling a longstanding party goal of allowing Medicare to use its heft to lower drug costs.
Democrats are also planning to extend the enhanced federal premium subsidies for Obamacare coverage through 2025, a year later than lawmakers recently discussed. That way, they wouldn’t expire just after the 2024 presidential election.
To boost revenue, the bill would impose a 15% minimum tax on the income large corporations report to shareholders, known as book income, as opposed to the Internal Revenue Service. The measure, which would raise $258 billion over a decade, would apply to companies with profits over $1 billion.
Concerned about how this provision would affect certain businesses, particularly manufacturers, Sinema has suggested that she won changes to the Democrats’ plan to pare back how companies can deduct depreciated assets from their taxes. The details remain unclear.
However, Sinema nixed her party’s effort to tighten the carried interest loophole, which allows investment managers to treat much of their compensation as capital gains and pay a 20% long-term capital gains tax rate instead of income tax rates of up to 37%.
The provision would have lengthened the amount of time investment managers’ profit interest must be held from three years to five years to take advantage of the lower tax rate. Addressing this loophole, which would have raised $14 billion over a decade, had been a longtime goal of congressional Democrats.
In its place, a 1% excise tax on companies’ stock buybacks was added, raising another $74 billion, according to a Democratic aide.
This story and headline have been updated with additional developments.

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