Collins offers amendment to raise tax rates on ultra-wealthy earners
The amendment has a tough path to getting a simple majority vote, although Sen. Roger Marshall (R-Kan.) told reporters Monday morning that he would back it.
The amendment would create a new 39.6 percent tax bracket for individuals earning more than $25 million and couples earning more than $50 million and allocate the money toward doubling the rural hospital relief fund, which is now funded at $25 billion in the bill.
Collins's amendment would double the size of the rural hospital relief fund to $50 million.
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Yahoo
2 hours ago
- Yahoo
Donald Trump gave Susan Collins a pass, for now. Will Maine voters?
Jul. 6—As the top Senate appropriator, Sen. Susan Collins was expected to be a key player in negotiations this summer over the sweeping tax and spending bill proposed by President Donald Trump. But as the final vote drew near on Tuesday, Collins was not the one being pressured by Senate leadership to support Trump's "Big Beautiful Budget." It was her fellow moderate Republican, Sen. Lisa Murkowski of Alaska, who was put through the meat grinder and ultimately voted in support of the bill, even though she admittedly doesn't like it, after receiving concessions to lessen the impact on her home state. Critics say that it was all part of the plan, speculating that Senate Majority Leader John Thune — and so far, Trump — gave Collins a free pass, allowing her to vote against a bill that polling suggests is deeply unpopular ahead of the 2026 midterms, when she will face voters. Murkowski, meanwhile, doesn't face reelection until 2029. Trump is not one to suffer disloyalty lightly. After Sen. Thom Tillis, R-N.C., eviscerated the bill in a floor speech, Trump attacked him online and threatened to primary him. Tillis voted against the bill and announced he would not seek reelection. Collins is the only congressional Republican from New England and the only Republican senator up for reelection in a state won by Vice President Kamala Harris in the 2024 presidential election. She is widely viewed as one of the few Republicans who can hold a statewide seat in Maine. Democrats believe Collins is vulnerable and the race is expected to draw hundreds of millions of dollars in outside spending. And national Democrats are trying to recruit Gov. Janet Mills, who strongly opposed the bill and put her concerns in writing to the entire delegation. Critics say that leadership knew they had the votes to pass the bill without Collins. Had they needed her, Collins would have been the only member of Maine's delegation to support the bill and would have presented a clear contrast for Mills, should she choose to run. In an interview with the Portland Press Herald/Maine Sunday Telegram on Wednesday, Collins pushed back against any suggestion that the Senate vote was orchestrated to give her a free pass. "That is absolutely ludicrous," Collins said, blaming "partisan Democrats" for spreading a "crazy untruth." "No one knew what her ultimate decision was going to be," Collins said of Murkowski. Collins held her cards close to her chest before the vote, refusing to say publicly which way she might vote but expressing concern about drastic cuts to Medicaid and food assistance, among other provisions. Collins won praise from Maine's hospitals for her "no" vote, for speaking out about the impact of Medicaid cuts and for trying to cushion the impact of taking health coverage away from an estimated 40,000 people in Maine. Those provisions in the bill are expected to push hospitals into greater financial distress but, unlike tax cuts that primarily benefit the wealthy, won't take effect until after the 2026 election. But political observers say Collins may not be able to avoid the blame for any negative consequences, given her party affiliation. "The problem is, she is part of a team that pushed forward a measure that will be very unpopular," said Dan Shea, political science professor at at Colby College in Waterville. "It's her colleagues, it's her caucus, that pushed through this bill. And there may be a good bit of guilt by association." COLLINS LACKS TRUMP'S EAR A recent poll conducted by the University of New Hampshire Survey Center found that 58% of respondents in Maine didn't want the bill to pass, including 94% of Democrats and 72% of independents. Less than a third wanted it to pass, which was similar with most other national polls. The online survey of 846 people was conducted from June 19-23 and has a margin of error of 3.4 percentage points. "She's independent, but she's also in lockstep with her Republican colleagues in a lot of moves, including leadership," Shea said. "Her first vote if she's reelected will be for a Republican majority leader, probably John Thune. This is the same leadership that pushed through this measure." Collins wasn't a vociferous outspoken critic of the bill, as was independent Sen. Angus King, though she expressed concerns about the Medicaid cuts. She declined repeated interviews with the Press Herald leading up the bill's passage, saying she wanted to see the final text first, which was not available until the last minute. She proposed an amendment that would have allowed tax cuts for people making more than $25 million to expire, while doubling an emergency fund for rural hospitals to $50 million, which is still believed to be far short of what will be needed to maintain services and prevent closures. Her amendment was voted down, but the additional funding was included in the final bill, without the tax increase. The Maine Hospital Association heaped praise on Collins in a written statement Wednesday. "We want to particularly thank Senator Collins for her efforts on behalf of Maine hospitals," the association said in a written statement. "It is very difficult to take a stance contrary to one's party caucus. However, as she has done many times, when Senator Collins feels Maine will be hurt, she fights for Maine. And we can not thank her enough. The lone mitigation measure for hospitals in the reconciliation package, the relief fund, was the direct result of Senator Collins' efforts." But Mark Brewer, chair of political science at the University of Maine in Orono, said Collins may have a hard time convincing voters that, as appropriations chair and a senior Republican senator with power and influence in the chamber, she did not play a pivotal role in shaping the bill. "You would think as head of the Senate Appropriations Committee — and also a key swing vote — she would have been in a powerful position to shape this kind of legislation," Brewer said. "But one thing we have learned about Trump so far in his second term is that those old positions of power may not matter as much as they used to." Only those who are close to Trump can influence his thinking, Brewer said. "In that sense, Collins didn't have a whole lot of influence in shaping this bill. Certainly not what you would expect from a Senate appropriations chair in previous administrations, for sure," he said. Collins is not in Trump's inner circle, though she did travel to Mar-a-Lago in February to discuss the budget. She has not supported any of his three campaigns for president and voted to convict him after the Jan. 6, 2021, riots at the Capitol. Trump publicly criticized Collins after The New York Times reported in 2022 that she and Sen. Mitch McConnell were recruiting "anti-Trump candidates." Trump called Collins "absolutely atrocious" and said he could have ousted her from her Senate seat. A month later, Trump called Collins "wacky" for leading efforts to make it harder for members of Congress to challenge election results and make it clear that the vice president only has a ceremonial role in counting electoral votes. The changes were made after Trump pressured former Vice President Mike Pence to overturn the 2020 election results. But she has also provided support at key moments, casting the deciding vote in Trump's first term to confirm Brett Kavanaugh to the U.S. Supreme Court, which later overturned nationwide abortion protections under Roe v. Wade. And she has supported some of his more controversial cabinet appointments in his second term, including Robert F. Kennedy Jr., Tulsi Gabbard and Russell Vought. Collins told the Press Herald on Wednesday that she informed the White House "weeks ago" that the bill would need to undergo significant changes to win her support. Even then, Collins was not at the center of the action as the vote drew near. In addition to Murkowski, Thune reportedly held late talks with Sen. Rand Paul, R-Ky., who ultimately voted against the bill because it included a $5 trillion increase in the national debt ceiling. It's unclear if Collins had similar meetings with the majority leader in the final hours. OPPONENTS POUNCE Although she voted against the bill, opponents are working overtime to tie her to Trump and the bill's passage, primarily by highlighting her procedural vote last weekend to advance the bill for a final debate and vote. Jordan Wood, a Bristol Democrat who is mounting the most aggressive challenge to Collins, said Maine's senior senator should have used the procedural vote to try to stop the bill, so lawmakers could start over. He described her as the decisive vote to advance the bill, even though her "no" vote on the motion would only have led to a 50-50 tie and Vice President JD Vance was prepared to cast a deciding vote in favor. "That (procedural vote) was her opportunity to organize an opposition to make sure that, given how devastating this bill will be for our state, she could stand up and stop it if she wanted to and if she had the courage to and she didn't," Wood said. "People in Maine have seen this before where she is given permission because she's not the decisive vote to vote against it. That's what we saw again." A famous Maine critic of Collins had a similar take. "As always, Susan Collins counted votes and decided she could vote no and the bill would still pass, thus saving her golden seat in the Senate," author Stephen King said in a social media post. "She and Murkowski seem to have a pact — whose turn is it to vote no this time?" Phillip Rench, an engineer from Waterboro who is running as an independent, also criticized Collins, questioning her influence. "Even though she voted against this bill, she is still responsible for it," Rench said in a written statement. "She failed to secure adequate funding for rural hospitals and now Mainers on Medicaid will face uncertainty and loss of coverage. To make matters worse, 3-4 Trillion Dollars will be added to the already 37 Trillion National Debt, of which our children will be paying interest on for the rest of their lives." WHAT REPUBLICANS THINK It's unclear how her vote will play with Republican voters, and more importantly Trump supporters, who make up an increasingly large percentage of Republicans. Collins has been greeted with mixed reactions at state party conventions, which have increasingly focused on supporting Trump. Carmen Calabrese, a Kennebunkport resident who has announced that he's challenging Collins for the Republican nomination, is running as a steadfast Trump supporter and urged passage of Trump's budget bill, saying it's "a winner for Maine" and urging Collins to "show some backbone." Calabrese blasted Collins in a news release after she voted against the bill. "What's the sense in sending a Republican Collins to DC when she votes with the Democrats?" Calabrese said in a written statement. "She has sold us out once again to the liberal media. She cares more about getting a headline than saving tipped workers money or giving relief to seniors. This obstructionist has to go." Despite their history and his attacks on other Republican opponents, Trump has not taken to social media to criticize Collins. Some say that speaks volumes, especially since Trump immediately threatened to primary Sen. Thom Tillis, R-North Carolina, after he eviscerated the bill in a floor speech. Tillis voted against the bill and announced that he would not seek reelection. As of late last week, Trump had not posted anything about Collins. That could be a reflection of Trump listening to his advisers and considering the midterms. Generally, the party that controls the White House loses seats in Congress during a midterm election, and that could be especially true with Trump, whose supporters generally turn out for him but not others. "(Trump) knew Tillis was vulnerable," Brewer said. "Maybe his advisers thought, 'We could find another Republican that can run competitively in North Carolina, but maybe we can't find another Republican who can do what Susan Collins can do in Maine.'" Copy the Story Link
Newsweek
3 hours ago
- Newsweek
The Dollar Is Sinking: Here's Why
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The U.S. dollar is tumbling as President Donald Trump's economic agenda—at the executive and legislative level—takes full shape. Economists told Newsweek this could advance Trump's goal of promoting American goods in foreign markets and strengthening exports, but warn that a weakened dollar comes with significant downsides, including the jeopardization of its status as the world's reserve currency. The U.S. Dollar Index—which tracks its value relative to a basket of major foreign currencies—has declined by more than 10 percent over the past six months. This marks the steepest first-half slump, and the worst beginning for a presidential term, since its creation in 1973. Achieving this milestone comes amid a period of flux for the U.S. economy. On Friday, Trump signed the One Big Beautiful Bill Act, which had been narrowly passed by the Republican-controlled House of Representatives the day before. The sweeping budget reconciliation package contains new spending measures and an extension of Trump's 2017 tax cuts, which, together, budget watchdogs believe could inflate the nation's already-sizable national deficit. President Donald Trump, joined by Republican lawmakers, signs the One, Big Beautiful Bill Act into law during an Independence Day military family picnic on the South Lawn of the White House on July 4, 2025... President Donald Trump, joined by Republican lawmakers, signs the One, Big Beautiful Bill Act into law during an Independence Day military family picnic on the South Lawn of the White House on July 4, 2025 in Washington, DC. MoreThis week will also see the expiry of the 90-day pause placed on Trump's reciprocal tariffs in April. While a handful of countries have secured trade deals, the president has suggested that nations who were unable to do so during the three-month window could be subject to even higher rates than those announced on "Liberation Day." Experts who spoke to Newsweek emphasized a confluence of these economic factors, and their combined impact on America's fiscal outlook, in the dollar's recent decline. "The dollar is depreciating because global investors are less confident in the United States providing stable policies geared toward macroeconomic growth and a strong financial system," said Ryan Monarch, a professor of economics at Syracuse University. "Recent policies such as extremely high tariffs, increased government debt, and worries about inflation have all contributed to the falling dollar." Monarch, a former principal economist at the Federal Reserve Board of Governors' International Finance Division, added that the prospect of the central bank lowering interest rates to stimulate economic growth prospects, "has led to weaker demand for dollar-denominated assets, and thus further dollar depreciation." Ryan Sweet, chief U.S. economist at Oxford Economics, similarly noted that investors were "reassessing the outlook for the US economy" as a result of the tariffs. "Tariffs will slow the U.S. economy and reduce the expected return on investment for investors, pushing some away from the dollar," he told Newsweek. Last month, the Organisation for Economic Co-operation and Development (OECD) cut its growth outlook for the U.S. economy to 1.6 percent from 2.2 percent in March; it said this reflected the "substantial increase" in import taxes, as well as "high economic policy uncertainty," declines in net immigration and reductions to the federal workforce. "The strength of any currency depends on people's willingness to hold it, and the world now is skeptical of the future of the U.S., especially with the passage of the budget bill," said Peter Simon, a professor at Northeastern University's Department of Economics. "So people around the world are selling their dollars for other currencies: euro, pound sterling, yen, and yuan for more stability." Photo-illustration by Newsweek/Getty What Are the Consequences of a Falling Dollar? A sharp decline in a currency's relative value carries with it a host of economic effects. These impacts are especially pronounced for the dollar, given its status as the world's primary reserve currency and the trillions held in dollar-denominated assets abroad. For Americans at home, a weakened dollar can increase the cost of imports, resulting in price inflation and the erosion of consumers' purchasing power. A declining dollar also makes it more expensive for Americans to travel abroad, where their dollars will translate into smaller sums of the local currency. "A depreciation in the U.S. dollar is inflationary as it will, over time, increase nonfuel import prices," Sweet said. "The depreciation in the dollar increases the risks that tariffs boost consumer prices more than anticipated this summer and into the fall." A falling dollar would also damage the national balance sheet of those countries who hoard stockpile it in reserves, while hurting foreign investors holding dollar-denominated assets such as Treasury bonds. However, it could make America a more affordable, and attractive, location for international tourists. Sweet added that a declining dollar can also prove a "tail wind" for exporters, by making their goods more affordable in the global market. This dual impact on imports and exports—reducing one while boosting the other—appears to align with one of Trump's stated tariff purposes: the reduction of trade deficits. His tariff announcements and their impact on the currency even led to speculation that deliberately "crashing" the dollar was a purposeful choice by the administration. Many in Trump's cabinet have previously expressed concern over the implications of an overly strong dollar, and skepticism regarding its status as the world's reserve currency. Vice President JD Vance, while still serving as an Ohio senator in 2023, said that the dollar's strength and centrality arguably represented "a massive subsidy to American consumers but a massive tax on American producers," given this resulted in floods of "mostly useless imports." Stephen Miran—now chair of Trump's Council of Economic Advisers—wrote in November that trade imbalances and the handicaps faced by domestic industry were rooted in "persistent dollar overvaluation." In April, Miran said that a strong dollar had placed "undue burdens on our firms and workers, making their products and labor uncompetitive on the global stage." However, others within his administration, notably Treasury Secretary Scott Bessent, have voiced their support for a strong dollar policy and safeguarding its dominant global position. Trump has consistently expressed similar support. In nominating the Treasury secretary in November, the president-elect said Bessent would help him "fortify our position as the World's leading economy, center of innovation and entrepreneurialism, destination for capital, while always, and without question, maintaining the U.S. Dollar as the reserve currency of the world." Amid talk of the BRICS economic alliance considering introducing an alternative reserve currency, the president also threatened each of the members with "100-percent tariffs" should they moved forward with this plan. However, Monarch said that the dollar's 2025 decline could make such a change more likely. "In the long run, the weakening dollar and less desire to hold U.S.-backed assets may strengthen efforts to design an international reserve system that is not just tied to the U.S. currency, but to other currencies around the world, including the Chinese renminbi," he added. Simon added that, while no single national currency has the power and geopolitical backing to lead to full de-dollarization, "a reserve currency basket" made up of several could rival its dominance in the future. The French Institute for International and Strategic Affairs (IRIS) found that the dollar still accounts for roughly 60 percent of global foreign exchange reserves, compared with around 20 percent for the euro, 5 percent for the Japanese yen, 4 percent for the pound, and only 2 to 3 percent for the yuan. Regardless of its longer-term fate, experts said that the dollar will continue to feel downward pressure in 2025 and beyond. Sweet said he expects the dollar to "stabilize in the second half of this year but resume its depreciation next year," given America's weakened growth outlook and persistent "fiscal sustainability concerns." Monarch added that none of the factors that has contributed to its decline shows signs of reversing in the near future. He said: "Trade deals to potentially lower tariffs have been delayed or underwhelming, recent fiscal policy moves appear likely to add significantly to U.S. government debt, and the effects of already-imposed tariffs on inflation are still uncertain."
Miami Herald
10 hours ago
- Miami Herald
Americans get ‘Big Beautiful Bill' tax cuts
President Donald Trump has signed into law the One, Big Beautiful Act (OBBA), and for taxpayers in high-tax states like California and New York, it may offer long-awaited relief - at least for a few years. The law temporarily raises the cap on the federal deduction for state and local taxes - known as the SALT deduction - from $10,000 to $40,000 beginning in 2026. Don't miss the move: Subscribe to TheStreet's free daily newsletter The cap will increase slightly each year with inflation through 2029, reaching $41,616. Starting in 2030, however, the cap snaps back to $10,000 unless Congress takes further action. Photo by Igor Omilaev on Unsplash The $10,000 SALT cap was introduced by the 2017 Tax Cuts and Jobs Act (TCJA), limiting the amount taxpayers could deduct for property taxes and state income or sales taxes. There was no cap prior to the TCJA. The restriction hit hardest in states with high property values and income taxes, reducing deductions for many upper-middle-class and affluent households. Under the OBBA, taxpayers with modified adjusted gross income (MAGI) over $500,000 in 2025 will see the expanded deduction phased down. Specifically, their SALT deduction will be reduced by 30% of the amount by which their MAGI exceeds that threshold - but never below the original $10,000 limit. That $500,000 threshold will also be adjusted for inflation through 2029. Earlier versions of the OBBA included provisions to limit common SALT workarounds - such as state passthrough entity taxes (PTETs) - which business owners often use to sidestep the cap. One proposal would have barred specified service trades or businesses (SSTBs) from deducting these taxes. Another would have capped the PTET deduction based on a formula tied to a taxpayer's unused SALT limit. But those measures didn't make it into the final law. Related: Social Security payment dates for July 2025: what you need to know "The adopted version of the bill merely increases the SALT cap and does not attempt to limit or address the various workarounds," wrote Alistair Nevius in the Journal of Accountancy. The American Institute of CPAs had pushed to preserve PTET usage - and, for now, they've succeeded. It's too early to say exactly how many taxpayers will benefit from the higher SALT cap. In 2017 - before the TCJA took effect - more than 46 million tax returns included itemized deductions, representing about 30% to 32% of all filers. But after the law nearly doubled the standard deduction and imposed the $10,000 SALT cap, the number of itemizers dropped sharply - down to roughly 17 to 18 million in 2018, and just 15 million by 2022. That's fewer than 10% of all returns. Related: Legendary fund manager has blunt message on 'Big Beautiful Bill' With the cap now temporarily rising to $40,000 and the standard deduction made permanent, that calculus may shift again. The number of taxpayers who choose to itemize is expected to increase - particularly those in high-cost states and those who make large charitable donations, both of whom are more likely to have deductible expenses that exceed the standard deduction threshold. Alongside the SALT relief, the OBBA also makes the TCJA's expanded standard deduction permanent. Starting in 2025, the new baseline amounts will be: $15,750 for single filers$23,625 for heads of household$31,500 for married couples filing jointly All adjusted annually for inflation beginning in 2026. Taxpayers age 65 and older will see a small but potentially meaningful benefit under the OBBA: a new, temporary $6,000 deduction aimed at easing their tax burden. But before you count on pocketing that full amount, it's important to understand the fine print. Related: Young workers face stark Social Security reality According to Kelly Phillips Erb, the managing shareholder of The Erb Law Firm - and widely known as the "Taxgirl" - this new provision is a deduction, not an exclusion, and not everyone will qualify. "This is an age-based deduction," Erb said in a recent Facebook post. "You don't need to be receiving Social Security to claim it - you just need to be at least 65. That means if you've deferred your Social Security benefits to age 70, you're still eligible." On the other hand, younger taxpayers who are receiving Social Security retirement benefits or are on Social Security Disability Insurance (SSDI) do not qualify unless they've reached age 65. Here's how the new deduction works: Amount: Up to $6,000 per You must be 65 or older and have a valid Social Security Phaseouts: The deduction begins to phase out at $150,000 for joint filers ($75,000 for all others) and disappears entirely once income reaches $350,000 for joint filers ($175,000 for others).Refundability: It's not refundable - meaning if your income is low enough that the deduction exceeds your tax liability, you don't get money Status: Available whether or not you Requirements: You must still report your Social Security income if you're otherwise required to file. And importantly, this deduction is temporary. It's in effect for tax years 2025 through 2028 - unless extended by future legislation. Some confusion has already cropped up online, with questions about whether the new deduction eliminates taxes on Social Security benefits. The answer is no - at least not across the board. "This doesn't mean Social Security benefits are now tax-free for everyone," Erb said. "According to the White House, before this deduction, about 64% of Social Security beneficiaries paid no tax on their benefits. With the new deduction, that number rises to 88%." So yes, more retirees will avoid taxes on their benefits - but high-income beneficiaries will still see some or all of their Social Security taxed. Alongside changes to the SALT deduction, standard deduction, and the senior bonus deduction the One, Big Beautiful Act (OBBA) delivers several key updates to the tax code that will affect families, business owners, and estate planners for years to come. Starting in 2025, the nonrefundable portion of the child tax credit increases to $2,200 per child and will be adjusted for inflation in future years. The law also makes permanent the refundable portion of the credit - currently $1,400 - and ensures that it, too, will rise with inflation. Importantly, the income thresholds at which the credit begins to phase out remain unchanged: $200,000 for single filers and $400,000 for joint filers. Those levels, which had been temporarily increased under the 2017 Tax Cuts and Jobs Act, are now permanent. In addition, the bill preserves the $500 nonrefundable credit for each qualifying dependent who isn't a child - such as elderly parents or college-age children - giving some relief to so-called "sandwich generation" households caring for multiple generations. For small business owners and the self-employed, the law brings welcome news: The popular 20% qualified business income (QBI) deduction under Section 199A is now permanent. While the House version of the bill would have raised the deduction to 23%, the final legislation retains the existing 20% rate. However, it does expand eligibility by increasing the income thresholds where the deduction begins to phase out for specified service trades or businesses (SSTBs), such as law, medicine, and financial services. For non-joint filers, the phase-in threshold increases from $50,000 to $75,000. For joint filers, it rises from $100,000 to $150,000 - a meaningful change for those who were previously phased out too quickly. In a further nod to Main Street businesses, the bill introduces a new inflation-adjusted minimum deduction of $400 for taxpayers with at least $1,000 in qualified business income from one or more active trades or businesses where they materially participate. For those concerned with legacy and estate planning, OBBA also delivers a major change. Starting in 2026, the estate and lifetime gift tax exemption will increase to $15 million for individuals - or $30 million for married couples filing jointly - and will be indexed for inflation in subsequent years. That's a significant shift from the current exemption levels, which are scheduled to revert to roughly $6 million per person in 2026 under the pre-TCJA rules. With this change, high-net-worth individuals have a much larger window to transfer wealth tax-efficiently - assuming the new exemption remains in place long-term. Related: How the IRS taxes Social Security income in retirement The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
