One of the big issues with the current tax plan is that it partially does away with state and local income tax deductions. In particular, it eliminates the ability to deduct state and local taxes above $10,000. That means personal taxes are set to rise for 13% of New Yorkers and 11% of California and New Jersey residents. However, states are already developing workarounds, such as replacing income tax with payroll tax or classifying state taxes as charitable donations.
FINSUM: Some say that the elimination of the deduction is unconstitutional. That will likely be fought out in court, but until then we imagine states will get very creative about this, especially as some of these states (like those mentioned) already pay in more to the federal government than they get back.
Bloomberg has published an admittedly biased article outlining the state of the special counsel probe into the White House’s ties to Trump. The piece takes a decidedly anti-Trump stance, but it does do a good job of laying out the current state of the investigation. There is so much information flowing out into media, that it is hard to see the forest for the trees. The piece says that a couple things are clear: the investigation will not end any time soon, and it is bound to get uglier as both sides dig in their heels.
FINSUM: To our readers, many of whom we have received emails from, we want to comment that out editorial staff each has their own views on this situation, and given the divisiveness of the issue, and of the Trump White House generally, it is nearly impossible to write anything considered “unbiased”. Therefore, there may at times be comments that offend some, but know that as a whole, our organization has no particular political standing and is not trying to espouse any particular view.
Yesterday saw a significant defeat for the Republican party, and a strong showing for Democrats. Democrat Doug Jones scored an improbable victory, snatching a Senate seat from Republican Roy Moore in a state that Trump carried by more than 27%. The win for Democrats in deeply red Alabama, is a worrying sign for Republicans, as it may show a weakening of their base. The victory for Jones was supported by a very high turnout amongst African American voters, Democrats sticking to their party, and a low turnout by rural white voters who form the Republican base.
FINSUM: Beyond just the symbolism, this is a significant defeat because it narrows the Republican senate majority to just 51-49, making it harder for the party to get things through.
There has been a lot of speculation lately that President Trump may in some way try to fire special counsel Robert Mueller. However, the likelihood of that occurring seems to have diminished significantly this week, as the plea deal with Mike Flynn has now made it legally difficult for Trump to dismiss Mueller. This is because doing so would likely give rise to claims of a cover-up and could lead to a constitutional crisis.
FINSUM: We think it would be politically unwise for Trump to try to dismiss Mueller as it would essentially look like a repeat of Nixon in 1973.
The seeming witch hunt to implicate the president into some kind of collusion scandal with Russia took another turn yesterday. Trump’s long-time lender for his business, Deutsche Bank, is reportedly turning over all their financial records relating to Mr. Trump after a subpoena from the Mueller investigation. The bank has been one of Trump’s most supportive lenders, giving his organization hundreds of millions of Dollar of loans over the years.
FINSUM: If this whole thing really does turn out to be baseless, which we think it will, we say poor Trump. He is having every aspect of his life and privacy invaded. This marks a definite turn in the investigation from focusing on contacts to focusing on finances.
In what comes as a shocking development in the Mueller probe into the Trump administration’s connections to Russia, former national security adviser Mike Flynn has just pleaded guilty to lying to federal investigators about his contacts with Russia. Flynn says he lied about a series of phone calls he had with the Russian ambassador last year following sanctions on Russia imposed by Obama. Flynn is now the senior-most White House official to face criminal charges by Mueller’s special counsel.
FINSUM: Mueller just seems to be working his way up the ladder towards Trump. What caught us off-guard here is just how quickly these charges came about following Manafort’s a few weeks ago. This whole investigation is moving faster than we expected.