Restaurants have a nervous eye on an upcoming deadline when steeper tariffs kick in
Drinks are a profit driver for United States restaurants, but higher import costs have eaten into margins and fed into consumer prices in the three months since President Donald Trump unveiled sweeping global tariffs.
A stone's throw from the White House, a
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
RNZ News
7 hours ago
- RNZ News
The winners and losers of Trump's ‘big, beautiful bill'
By Matt Egan and Tami Luhby , CNN President Donald Trump in the Oval Office of the White House in Washington, DC, on 26 March. Photo: Francis Chung/Politico/Getty Images via CNN Newsource Analysis - President Donald Trump has promised that the "big, beautiful bill" passed by Congress will be one of the most successful pieces of legislation in American history. Of course, the ultimate beauty of this sweeping legislation is very much in the eye of the beholder. The bill could end up boosting some workers and industries, while others may be left worse off. Corporate America Big business groups, including the US Chamber of Commerce and Business Roundtable, applauded the Senate's passage of the bill on Tuesday. Corporations are betting they will benefit from the legislation making permanent the tax breaks in the 2017 Tax Cuts and Jobs Act. The package would restore a tax break from the 2017 tax package that allowed businesses to fully write off the cost of equipment in the first year it was purchased. The incentive has been phasing out since 2023. Also, the legislation would once again allow businesses to write off the cost of research and development in the year it was incurred. The TCJA required that companies deduct those expenses over five years, starting in 2022. Manufacturers Manufacturers are especially happy that the bill would make significant changes to how the US tax code treats the construction of new manufacturing facilities. Businesses will be allowed to fully and immediately deduct the cost of building new manufacturing facilities. This temporary provision is retroactive to 19 January, 2025 and continues for construction that begins before 1 January, 2029. And in a bid to incentivise more chipmaking in America, the legislation would enhance tax credits for semiconductor firms building manufacturing facilities in the United States. Small businesses and partnerships The National Federation of Independent Business, the leading small business lobbying group, praised the legislation for making permanent a special deduction for the owners of certain pass-through entities who pay businesses taxes on their individual tax returns. That deduction, which applies to small businesses and partnerships formed by lawyers, doctors and investors, would get increased in the House version of the bill from 20 percent to 23 percent. The Senate bill kept it at 20 percent. High-income Americans The net income for the top 20 percent of earners would increase by nearly US$13,000 per year, after taxes and transfers, according to an analysis of a near-final version of the Senate bill by Penn Wharton Budget Model. That amounts to a 3 percent average increase in income for those households. For the top 0.1 percent of earners, the average annual income gain would amount to more than US$290,000, according to Penn Wharton. Americans living in high-tax states should also benefit because the bill temporarily increases limits on deductions for state and local taxes for householders making up to US$500,000 annually to US$40,000 per year for five years. However, millionaires who lose their jobs will not be able to collect unemployment benefits, according to a recent provision added to the Senate bill. Workers who receive tips and overtime Certain workers will receive an extra tax break through 2028. Employees who work in jobs that traditionally receive tips could deduct up to US$25,000 in tip income from their federal income taxes, while workers who receive overtime could deduct up to US$12,500 of that extra pay. However, highly compensated individuals, who make more than US$160,000 in 2025, would not qualify. Low-income Americans Many people at the lowest end of the income ladder would be worse off because the package would enact historic cuts to the nation's safety net program, particularly Medicaid and food stamps. Among the many changes to these programs would be the addition of federally mandated work requirements to Medicaid for the first time in its 60-year history and the expansion of the work mandate in the Supplemental Nutrition Assistance Program, or SNAP, the formal name for food stamps. Parents of children ages 14 and up are among those who would have to work, volunteer, take classes or participate in job training to keep their benefits. Millions of low-income Americans are expected to lose their benefits because of the work requirements and the bill's other measures affecting Medicaid and food stamps. Notably, few of those dropped from Medicaid coverage would have access to job-based health insurance, according to a Congressional Budget Office report about the House version of the package. Those in the lowest-income group, earning less than US$18,000 a year, would see a US$165 reduction in their after-tax, after-transfer income, once the safety net cuts are taken into account, according to Penn Wharton. That's a 1.1 percent decrease. The next level, who earn between US$18,000 and US$53,000, would get a US$30 bump in income, or 0.1 percent. Middle-income households would see their income rise by US$1.430, or 1.8 percent. They earn between US$53,000 and US$96,000. The health provisions won't only hit low-income Americans. The Senate is also tightening verification requirements for the Affordable Care Act's federal premium subsidies, which could also leave some middle-income Americans uninsured. All told, the bill could result in more than 10 million more people being uninsured in 2034, according to a CNN analysis of the bill and CBO forecasts. Hospitals Hospitals are not happy with the health care provisions of the bill, which would reduce the support they receive from states to care for Medicaid enrollees and leave them with more uncompensated care costs for treating uninsured patients. "The real-life consequences of these nearly $1 trillion in Medicaid cuts - the largest ever proposed by Congress - will result in irreparable harm to our health care system, reducing access to care for all Americans and severely undermining the ability of hospitals and health systems to care for our most vulnerable patients," said Rick Pollack, chief executive of the American Hospital Association. The association said it is "deeply disappointed" with the bill, even though it contains a US$50 billion fund to help rural hospitals contend with the Medicaid cuts, which hospitals say is not nearly enough to make up for the shortfall. Clean energy and EVs The Senate removed a last-minute excise tax on wind and solar that experts warned would have been a "killer" for the clean energy industry. However, the Senate bill still strips tax incentives for wind, solar and other renewable energy projects by 2027 and gives developers stringent requirements to claim them. The American Clean Power Association slammed the legislation as a "step backward for American energy policy" that will eliminate jobs and raise electric bills. Electric vehicle makers could also be left worse off because the GOP bill ends EV tax credits of up to US$7500 at the end of September. Previously those tax credits were scheduled to last through 2032, providing a powerful incentive for car buyers. Deficit hawks The Senate version of the package would increase the deficit by about US$3.4 trillion over the next decade, according to CBO. Adding trillions to the debt risks lifting already elevated interest rates. That in turn will make it more expensive for Americans to finance the purchase of a car or a home and for businesses to borrow money to grow. Not only that, but higher rates would force the federal government to devote even greater resources to finance its own mountain of debt. The CBO expects US federal government interest costs to surpass US$1 trillion per year. US spending on interest has already more than tripled since 2017, surpassing what the federal government's entire defense budget. - CNN
NZ Herald
7 hours ago
- NZ Herald
House passes tax and immigration bill, sending it to Trump's desk
Republicans on Thursday notched the first major legislative victory of President Donald Trump's second term, a mammoth tax and immigration agenda the GOP hopes will reshape the US economy and unwind many of the Biden administration's accomplishments. The House, in a 218 to 214 vote, passed Trump's so-called 'One Big
RNZ News
10 hours ago
- RNZ News
After record Democratic speech, House Republicans begin final vote on Trump tax-cut bill
By Bo Erickson, Richard Cowan and David Morgan US House Minority Leader Hakeem Jeffries (D-NY) walks off the House floor after speaking for 8 hours and 45 minutes. Photo: AFP / Getty Images / Kevin Dietsch The Republican-controlled House of Representatives on Thursday (US time) launched a final yes-or-no vote on President Donald Trump's massive tax-cut and spending bill after the chamber's top Democrat delayed action with a record-breaking speech that lasted more than eight hours. Republicans called the vote after a marathon overnight session in which they cleared a procedural hurdle, setting the stage for final passage. If approved, the bill will go to Trump to sign into law. "Now we are finally ready to fulfill our promise to the American people," House Speaker Mike Johnson said on the House floor. Republicans control the chamber 220-212 and can afford to lose no more than three votes from their side. The bill would extend Trump's 2017 tax cuts, cut healthcare and food safety net programmes, fund the president's immigration crackdown, and eliminate many green-energy incentives. It also includes a $5 trillion increase in the nation's debt ceiling, which lawmakers must address in the coming months to avert a devastating default. Republicans broadly support the bill, which contains most of Trump's domestic priorities, saying it would spur economic growth and deliver tax breaks to Americans across the economic spectrum. Democrats are united in opposition to the bill but lack the votes to stop it. House Democratic Leader Hakeem Jeffries blasted the bill as a giveaway to the wealthy in an eight-hour, 46-minute speech that set a new record for the chamber. "This disgusting abomination is not about improving the quality of life of the American people," he said. "The focus of this bill, the justification for all of the cuts that will hurt everyday Americans is to provide massive tax breaks for billionaires." Jeffries' speech recalled a record-setting April speech by Democratic Senator Cory Booker that accused Trump of "recklessly" challenging the nation's democratic institutions. The past two weeks have shown deep Republican divides on the bill, which would add $3.4 trillion to the nation's $36.2 trillion in debt. That debt has grown steadily over the past two decades regardless of which party was in control in Washington. The bill would also make major cuts to social programmes including Medicaid, ultimately leaving nearly 12 million Americans without health insurance. Rural hospitals have warned that could force them to scale back service, prompting Republicans to add $50 billion to help keep them afloat. A handful of Republican holdouts have objected to the bill. One, Senator Thom Tillis, opted not to seek re-election after voting against it. Nonetheless, Trump has succeeded in getting the votes to advance the legislation at each step of the way. The Senate passed the legislation by the narrowest possible margin on Tuesday. US House Speaker Mike Johnson, on the right, with President Donald Trump and Vice President J D Vance. Photo: WIN MCNAMEE Votes in the House were held open for hours on Wednesday during the day and overnight as House Speaker Mike Johnson and the White House talked with reluctant members. Republican leaders said Trump made late-night phone calls to win over wavering Republicans, but they predicted that some would still vote against it. "Nothing has been unanimous in this process, and that's going to hold true on the floor," Representative Steve Scalise, the No. 2 House Republican, told reporters. Trump kept up the pressure. "FOR REPUBLICANS, THIS SHOULD BE AN EASY YES VOTE. RIDICULOUS!!!" he wrote on social media. Any changes made by the House would require another Senate vote, which would make it all but impossible to meet Trump's self-imposed deadline of getting the legislation approved by the July 4 Independence Day holiday. Scalise said that delay would not happen. "What really got everybody to the finish line is the realisation, there aren't going to be any more changes to this bill. It's time to come together, make a decision," he said. -Reuters
