Latest news with #ErnieTedeschi
Bloomberg
01-07-2025
- Business
- Bloomberg
Richest 20% Get Income Boost in Trump Tax Bill
Ernie Tedeschi, director of economics at the Yale Budget Lab, breaks down the potential impact of the Trump tax bill on both the economy and American families as the bill heads back to the House of Representatives. (Source: Bloomberg)
CBS News
30-06-2025
- Business
- CBS News
"Big, beautiful bill" could soon give tipped workers a new tax break. Here's what to know.
President Trump's promise to eliminate taxes on worker tips could soon come to fruition as senators try to iron out the final details of a massive budget package he has dubbed the "big, beautiful bill." One part of the legislation, the centerpiece of the Trump administration's economic agenda, would provide workers who rely on tips for a large share of their income, such as waiters, bartenders and hairdressers, with relief from federal income tax on those tips. The White House has framed the tax cuts as a win for the working class. But critics such as the Independent Restaurant Coalition have pushed back on that notion, saying the benefits for tipped workers would be temporary and that this apparent tax cut wouldn't help most low-wage workers. How would "no tax on tips" work? The "no tax on tips" provision in the spending bill would create a new deduction for tipped workers, eliminating what they owe in federal income tax. Tipped workers would still have to pay state and local income tax and payroll taxes. The House and Senate versions of the tax and spending bill vary on a few key points, including how much a worker could claim in deductions. The Senate proposal limits that deduction to $25,000, while the House version is uncapped. Under the House measure, meanwhile, only people with annual income of $160,000 or less would qualify for the tipping tax break, while the Senate version would phase out benefits for individuals whose income exceeds $150,000 or couples whose income exceeds $300,000. Notably, however, under the budget bill those tip tax cuts would extend only through 2028, and so Congress could restrict or even abolish the tax break in future. Who would benefit? A May report from the White House's Council of Economic Advisers estimates that eliminating taxes on tips for eligible workers would increase their average take-home pay by $1,675 per year. According to the White House, a June survey found that 83% of hourly workers support eliminating taxes on tips. "These results suggest that any measure increasing the amount of immediately available income — such as untaxed tips — would provide meaningful, stabilizing support for a large segment of the hourly workforce," according to that report. Data from the Yale Budget Lab shows that roughly 4 million people — 2.5% of the American workforce — worked in tipped jobs as of 2023. But given the way the budget bill is written, not all would benefit. The nonpartisan policy research center notes in a recent analysis that over a third of tipped workers in the U.S. are already exempt from federal income tax because their earnings are too low. "A deduction for tipped work is actually a pretty horrible way to help low-wage workers," Ernie Tedeschi, the director of economics at the Yale Budget Lab, told CBS MoneyWatch. "You're only helping a narrow slice of them, and it's not helping the lowest of low-wage workers because they don't have any federal tax liability to begin with." Only about 4% of workers who earn less than $25 per hour also get tips, the group has found. As a result, low-wage servers at many restaurants would qualify for the tax break, but fast-food employees would not despite earning similar incomes. "It's going to help some very, very high earners, along with some middle earners," Sylvia Allegretto, senior economist at the Center for Economic and Policy Research, told CBS MoneyWatch. "The lion's share of low-wage workers, it's not going to touch because they're not tipped workers." A better way to helps low-wage workers, labor advocates say, would be to raise the federal minimum wage, which has been stuck at $7.25 an hour since 2009. "It's not that these workers pay too much in taxes or that taxes are a problem," Allegretto said. "The problem is they just don't earn enough money."
Yahoo
26-05-2025
- Business
- Yahoo
Your Memorial Day cookout might be more expensive this year
Memorial Day marks the unofficial start to summer, but this year, it may also kick off a season of higher prices. Small businesses that sell beer, fireworks and other summer staples told CNN they are grappling with higher costs amid new tariffs that the Trump administration placed on nearly all imports to the United States last month. Here's what you should know. While many economists expect prices to rise from President Donald Trump's tariffs, it's certainly true that not all items are seeing price increases — yet. In fact, US inflation in April slowed to its lowest rate in more than four years. That means some summer products may still be spared from an inflationary squeeze as tariffs work their way through the economy, said Ernie Tedeschi, the former chief economist at the White House Council of Economic Advisers during the Biden administration and the director of economics at the Budget Lab at Yale University, which has been tracking the tariff impact on consumers. But if you're planning a cookout, tariff-induced price increases could hit your grocery bill sooner than other price hikes. 'Perishable goods like food are the imports that turn over more quickly,' Tedeschi said. 'So the price that you see at any given time is more likely to reflect tariffs.' The cost of buying a new barbecue to grill that food might still be stable, though, he said. 'Where there's more of a delay on tariffs are things like durable goods, like a barbecue or grill,' Tedeschi said. 'The reason is that retailers like Home Depot and Best Buy generally still have a large pre-tariff inventory. They will likely sell through that first before they start selling the tariffed goods that cost more.' Another key ingredient to most barbecues also hasn't been spared by tariffs: beer. In April, President Donald Trump placed a 25% tariff on imported aluminum and steel, including empty aluminum cans and imported canned beer. About 38.5%, or 16.1 million barrels of imported beer, came in cans in 2024, according to the Brewers Association, a trade association for brewers. Even local, US-based brewers are feeling cost pressures rise. Sheila Malone, a manager at Long Ireland Beer Company in Riverhead, New York, told CNN that rising expenses have left the future of her business uncertain. Malone said she's seen the cost of everything from hops to plastic cups rise over the last few years. Now, she estimates the cost of the aluminum cans her company purchases has risen between 10% and 15% this year. 'Every day we open up our social media and we see another brewery that we follow saying they are closing their doors, and that's a really scary reality for us,' Malone said. Long Ireland Beer Company recently raised its prices for the first time in years to keep up, said Malone, who added that the company is searching for lower-cost aluminum suppliers and seeking new ways to grow profits to stay afloat. Memorial Day weekend also kicks off the busy season for fireworks businesses. Douglas Burda, the CEO of Red Apple Fireworks, said the majority of fireworks are imported from China, which has been producing fireworks for hundreds of years. There are very few businesses that manufacture fireworks in the United States, Burda noted. On April 10, tariffs on nearly all Chinese imports, including fireworks, climbed as high as 145% as a tit-for-tat trade conflict between China and the United States escalated. About a month later, the Trump administration announced it would temporarily lower the tax on Chinese imports to 30%. Burda said he hasn't had to raise prices yet, since his company has stockpiled enough fireworks to last through the summer in its large warehouse and retail spaces. However, Americans who buy fireworks at roadside stands will likely face higher prices this summer due to tariffs, Burda said. 'Consumers by and large buy fireworks at the last minute on the side of the road. You're always going to see higher prices when you do that,' Burda said. 'But now, for certain, those already-high prices are going to be even higher.' However, there may be one place to find savings if you are one of the nearly 40 million Americans traveling by car this Memorial Day. The national average price of a gallon of gasoline is expected to be $3.08 on Memorial Day, according to projections released Tuesday by fuel savings platform GasBuddy. That is the lowest gas price for Memorial Day weekend since 2021. For many Americans, Memorial Day is about more than pool parties and picnics. It is a day dedicated to honoring and remembering the people who died while serving in the US military. Americans who may be looking to purchase an American flag this holiday weekend will have a harder time finding cheaper flags produced overseas this year, said Reggie VandenBosch, who works at Valley Forge Flag Company, one of the largest American flag manufacturers. That's because earlier this month, a major shipping loophole, known as the de minimis exemption, which allowed shipments of goods worth $800 or less to come into the United States duty-free, expired. Now those lower-cost shipments are taxed between 30% and 54%. Before the loophole was closed, e-commerce sites like Amazon had been flooded with cheaper flags claiming to be American-made. 'Many Americans don't think of an American flag as being an American flag if it's made offshore,' VandenBosch said. 'Now that the de minimis loophole was eliminated, we're already starting to see sales return on those platforms back to the domestic players.' - CNN's Matt Egan contributed to reporting. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNN
26-05-2025
- Business
- CNN
Your Memorial Day cookout might be more expensive this year – thanks to tariffs
Memorial Day marks the unofficial start to summer, but this year, it may also kick off a season of higher prices. Small businesses that sell beer, fireworks and other summer staples told CNN they are grappling with higher costs amid new tariffs that the Trump administration placed on nearly all imports to the United States last month. Here's what you should know. While many economists expect prices to rise from President Donald Trump's tariffs, it's certainly true that not all items are seeing price increases — yet. In fact, US inflation in April slowed to its lowest rate in more than four years. That means some summer products may still be spared from an inflationary squeeze as tariffs work their way through the economy, said Ernie Tedeschi, the former chief economist at the White House Council of Economic Advisers during the Biden administration and the director of economics at the Budget Lab at Yale University, which has been tracking the tariff impact on consumers. But if you're planning a cookout, tariff-induced price increases could hit your grocery bill sooner than other price hikes. 'Perishable goods like food are the imports that turn over more quickly,' Tedeschi said. 'So the price that you see at any given time is more likely to reflect tariffs.' The cost of buying a new barbecue to grill that food might still be stable, though, he said. 'Where there's more of a delay on tariffs are things like durable goods, like a barbecue or grill,' Tedeschi said. 'The reason is that retailers like Home Depot and Best Buy generally still have a large pre-tariff inventory. They will likely sell through that first before they start selling the tariffed goods that cost more.' Another key ingredient to most barbecues also hasn't been spared by tariffs: beer. In April, President Donald Trump placed a 25% tariff on imported aluminum and steel, including empty aluminum cans and imported canned beer. About 38.5%, or 16.1 million barrels of imported beer, came in cans in 2024, according to the Brewers Association, a trade association for brewers. Even local, US-based brewers are feeling cost pressures rise. Sheila Malone, a manager at Long Ireland Beer Company in Riverhead, New York, told CNN that rising expenses have left the future of her business uncertain. Malone said she's seen the cost of everything from hops to plastic cups rise over the last few years. Now, she estimates the cost of the aluminum cans her company purchases has risen between 10% and 15% this year. 'Every day we open up our social media and we see another brewery that we follow saying they are closing their doors, and that's a really scary reality for us,' Malone said. Long Ireland Beer Company recently raised its prices for the first time in years to keep up, said Malone, who added that the company is searching for lower-cost aluminum suppliers and seeking new ways to grow profits to stay afloat. Memorial Day weekend also kicks off the busy season for fireworks businesses. Douglas Burda, the CEO of Red Apple Fireworks, said the majority of fireworks are imported from China, which has been producing fireworks for hundreds of years. There are very few businesses that manufacture fireworks in the United States, Burda noted. On April 10, tariffs on nearly all Chinese imports, including fireworks, climbed as high as 145% as a tit-for-tat trade conflict between China and the United States escalated. About a month later, the Trump administration announced it would temporarily lower the tax on Chinese imports to 30%. Burda said he hasn't had to raise prices yet, since his company has stockpiled enough fireworks to last through the summer in its large warehouse and retail spaces. However, Americans who buy fireworks at roadside stands will likely face higher prices this summer due to tariffs, Burda said. 'Consumers by and large buy fireworks at the last minute on the side of the road. You're always going to see higher prices when you do that,' Burda said. 'But now, for certain, those already-high prices are going to be even higher.' However, there may be one place to find savings if you are one of the nearly 40 million Americans traveling by car this Memorial Day. The national average price of a gallon of gasoline is expected to be $3.08 on Memorial Day, according to projections released Tuesday by fuel savings platform GasBuddy. That is the lowest gas price for Memorial Day weekend since 2021. For many Americans, Memorial Day is about more than pool parties and picnics. It is a day dedicated to honoring and remembering the people who died while serving in the US military. Americans who may be looking to purchase an American flag this holiday weekend will have a harder time finding cheaper flags produced overseas this year, said Reggie VandenBosch, who works at Valley Forge Flag Company, one of the largest American flag manufacturers. That's because earlier this month, a major shipping loophole, known as the de minimis exemption, which allowed shipments of goods worth $800 or less to come into the United States duty-free, expired. Now those lower-cost shipments are taxed between 30% and 54%. Before the loophole was closed, e-commerce sites like Amazon had been flooded with cheaper flags claiming to be American-made. 'Many Americans don't think of an American flag as being an American flag if it's made offshore,' VandenBosch said. 'Now that the de minimis loophole was eliminated, we're already starting to see sales return on those platforms back to the domestic players.'
CNN
26-05-2025
- Business
- CNN
Your Memorial Day cookout might be more expensive this year – thanks to tariffs
Memorial Day marks the unofficial start to summer, but this year, it may also kick off a season of higher prices. Small businesses that sell beer, fireworks and other summer staples told CNN they are grappling with higher costs amid new tariffs that the Trump administration placed on nearly all imports to the United States last month. Here's what you should know. While many economists expect prices to rise from President Donald Trump's tariffs, it's certainly true that not all items are seeing price increases — yet. In fact, US inflation in April slowed to its lowest rate in more than four years. That means some summer products may still be spared from an inflationary squeeze as tariffs work their way through the economy, said Ernie Tedeschi, the former chief economist at the White House Council of Economic Advisers during the Biden administration and the director of economics at the Budget Lab at Yale University, which has been tracking the tariff impact on consumers. But if you're planning a cookout, tariff-induced price increases could hit your grocery bill sooner than other price hikes. 'Perishable goods like food are the imports that turn over more quickly,' Tedeschi said. 'So the price that you see at any given time is more likely to reflect tariffs.' The cost of buying a new barbecue to grill that food might still be stable, though, he said. 'Where there's more of a delay on tariffs are things like durable goods, like a barbecue or grill,' Tedeschi said. 'The reason is that retailers like Home Depot and Best Buy generally still have a large pre-tariff inventory. They will likely sell through that first before they start selling the tariffed goods that cost more.' Another key ingredient to most barbecues also hasn't been spared by tariffs: beer. In April, President Donald Trump placed a 25% tariff on imported aluminum and steel, including empty aluminum cans and imported canned beer. About 38.5%, or 16.1 million barrels of imported beer, came in cans in 2024, according to the Brewers Association, a trade association for brewers. Even local, US-based brewers are feeling cost pressures rise. Sheila Malone, a manager at Long Ireland Beer Company in Riverhead, New York, told CNN that rising expenses have left the future of her business uncertain. Malone said she's seen the cost of everything from hops to plastic cups rise over the last few years. Now, she estimates the cost of the aluminum cans her company purchases has risen between 10% and 15% this year. 'Every day we open up our social media and we see another brewery that we follow saying they are closing their doors, and that's a really scary reality for us,' Malone said. Long Ireland Beer Company recently raised its prices for the first time in years to keep up, said Malone, who added that the company is searching for lower-cost aluminum suppliers and seeking new ways to grow profits to stay afloat. Memorial Day weekend also kicks off the busy season for fireworks businesses. Douglas Burda, the CEO of Red Apple Fireworks, said the majority of fireworks are imported from China, which has been producing fireworks for hundreds of years. There are very few businesses that manufacture fireworks in the United States, Burda noted. On April 10, tariffs on nearly all Chinese imports, including fireworks, climbed as high as 145% as a tit-for-tat trade conflict between China and the United States escalated. About a month later, the Trump administration announced it would temporarily lower the tax on Chinese imports to 30%. Burda said he hasn't had to raise prices yet, since his company has stockpiled enough fireworks to last through the summer in its large warehouse and retail spaces. However, Americans who buy fireworks at roadside stands will likely face higher prices this summer due to tariffs, Burda said. 'Consumers by and large buy fireworks at the last minute on the side of the road. You're always going to see higher prices when you do that,' Burda said. 'But now, for certain, those already-high prices are going to be even higher.' However, there may be one place to find savings if you are one of the nearly 40 million Americans traveling by car this Memorial Day. The national average price of a gallon of gasoline is expected to be $3.08 on Memorial Day, according to projections released Tuesday by fuel savings platform GasBuddy. That is the lowest gas price for Memorial Day weekend since 2021. For many Americans, Memorial Day is about more than pool parties and picnics. It is a day dedicated to honoring and remembering the people who died while serving in the US military. Americans who may be looking to purchase an American flag this holiday weekend will have a harder time finding cheaper flags produced overseas this year, said Reggie VandenBosch, who works at Valley Forge Flag Company, one of the largest American flag manufacturers. That's because earlier this month, a major shipping loophole, known as the de minimis exemption, which allowed shipments of goods worth $800 or less to come into the United States duty-free, expired. Now those lower-cost shipments are taxed between 30% and 54%. Before the loophole was closed, e-commerce sites like Amazon had been flooded with cheaper flags claiming to be American-made. 'Many Americans don't think of an American flag as being an American flag if it's made offshore,' VandenBosch said. 'Now that the de minimis loophole was eliminated, we're already starting to see sales return on those platforms back to the domestic players.'
