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5 days ago
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How the Trump tax bill could help China win at A.I.
Republicans in Congress produced a surprise winner this week when they axed hundreds of billions of dollars in federal clean-energy subsidies: China's artificial intelligence industry. China is pouring money into energy production to support its bid to dominate AI. America's tech industry, meanwhile, has been scrounging for more energy to run power-hungry AI data centers and strongly urged Congress not to wipe out solar and wind tax credits. Subscribe to The Post Most newsletter for the most important and interesting stories from The Washington Post. Solar panels and windmills are the fastest-growing sources of power in the United States, accounting for 80 percent of new energy being added to the grid. Yet Republican lawmakers and Trump administration officials remain intent on stifling clean energy progress in America, calling it Biden-era folly. Now the consequences of the massive cuts in the GOP tax and budget bill are coming into focus. Modeling of the package by energy economists shows they will substantially reduce the amount of electricity added to the U.S. power grid in the coming years, even as China races ahead. Wind and solar power 'is critical in the near term,' said Ben King, director of the U.S. energy program at the Rhodium Group, a research firm that has developed projections of the bill's impact. 'This creates a risk that energy projects just won't get built. At the same time, China is adding staggering electricity capacity.' The wind and solar electricity that China added to its power grid in just the first five months of this year is more than quadruple all the new electricity the U.S. added to its grid from all sources in 2024. China is simultaneously rapidly expanding its fleet of fossil fuel and nuclear plants. The Trump administration plans to accelerate new electricity generation from natural gas and nuclear power, but those efforts will take years, experts warn. There are no major new nuclear plants under construction, and they can take a decade or more to build. A global backlog of gas turbines means it can take five years just to build a single gas-powered plant. 'We need a huge amount of electricity after 20 years in which we did not have to deal with rising demand,' said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University. 'Other countries are moving fast and being quite innovative. If we are not adding new power to the grid, companies are going to have to get it from other places.' According to the think tank Energy Innovation, the cuts in the Senate's version of the bill, which survived the House vote intact Thursday, would reduce the amount of new electricity the U.S. is able to bring online over the next decade by 344 gigawatts - enough to power nearly half the homes in the country. The loss of such generation would create an immense challenge for not just AI companies, but other industries needing to power factories as well as residential customers struggling with rising utility costs. The models are built on the premise that the loss of tax credits will boost development costs, which would require solar and wind operators to force up rates, rattling investors and risking the viability of projects. The 344 gigawatts in new power that Energy Innovation estimates would be lost is based on an assumption that solar and wind development drops 50 percent by 2035. The Trump administration waves away such warnings as overblown. The president says the tax credits that have propelled the growth of renewable energy in the U.S. are a 'scam,' arguing that wind and solar installations are a blight on the landscape. The administration contends intermittent energy produced by wind and solar, despite advances in battery technology, don't meet the needs of industry, especially the enormous, 24/7 demands of AI data centers. Energy Secretary Chris Wright calls renewable energy a 'parasite' on the power grid, undermining its stability and consuming transmission-line capacity that could be delivering more stable gas or nuclear energy. "Winning the AI race will require a significantly larger supply of around-the-clock, reliable, and uninterrupted power – unfortunately, this was not a priority of the last administration,' he said in a statement Wednesday night. Tech firms and their industry groups say eliminating the tax incentives for clean power hamstrings their ability to compete with Chinese AI development. They also say it could lead to soaring electricity prices in the United States. Both the Data Center Coalition and the Clean Energy Buyers Association, industry groups led by tech firms, warned lawmakers that the imperiled tax credits are needed for domestic AI growth. The key tax credits for large wind and solar installations will be phased out for projects not under construction by the end of June 2026 under the bill, which Trump hoped to sign Friday following expected House passage. The Biden-era incentives would have extended into the 2030s. There are thousands of eligible projects that have been announced but not yet started, amounting to a half-trillion dollars in planned investment, according to Energy Innovation. Now the question is how many of those projects can start construction before the deadline. Depending on how many projects can get shovels in the ground quickly, said Aaron Zubaty, chief executive of Eolian, a large clean energy developer, 'the U.S. has a fighting chance to keep major data center developments domestic and not lose them to the Middle East.' But, he said, China's advantage is nonetheless cemented by the budget bill. 'I've had multiple people I work with in Europe say to me that it is pretty clear who is going to be the dominant superpower in a decade, and that it will not be the U.S.,' he said. 'Dominance now depends on who has the most electricity. And by only building new gas, coal, and nuclear power plants you are not going to be able to grow U.S. supply quickly enough.' Industry officials say countries like Saudi Arabia, Qatar and the United Arab Emirates are aggressively courting American AI projects, offering plentiful, cheap power from renewables and gas. But locating major U.S. AI infrastructure in a region where alliances are constantly shifting and enemy combatants are an arm's length away 'is not good for America's national security interests or its economy,' Bordoff said. To keep up with the demands of AI and other industries, federal regulators say the United States needs to add to its grid by 2035 the amount of power used by all of California, Texas and New York combined. Many companies are feeling burned by the abrupt reversal of clean energy incentives, said Jason Grumet, chief executive of the American Clean Power Association, which represents several large companies heavily invested in both gas and renewables. As the Trump administration encourages investment in gas plants, companies are left to wonder if the federal support will still be there after a new president is in office. 'Every part of the energy economy is worried that they will make investments that in four years will be disfavored by the next administration,' Grumet said. 'We need durable energy policy.' Related Content Arthur Ashe's knack for reinvention led him to history at Wimbledon Newlywed detained by ICE freed after 141 days and two deportation attempts The Met opens a dazzling wing of non-European art 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
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30-06-2025
- Business
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Trump's tax bill conflicts with Trump's trade goals
President Donald Trump says chronic U.S. trade deficits are a national emergency. His tax bill will make them worse. The Senate began voting Saturday on the president's signature legislation, which would extend his 2017 tax cuts and fund enhanced immigration enforcement. Subscribe to The Post Most newsletter for the most important and interesting stories from The Washington Post. Though the measure would slash social programs such as Medicaid, it is expected to add trillions of dollars to the national debt. The House-passed version of the bill would cost $3.4 trillion in increased federal deficits over the next decade, according to the nonpartisan Congressional Budget Office. Because the government would need to borrow more money to cover that shortfall, interest rates would likely rise. A stronger dollar - a side effect of higher rates - would make U.S. exports more expensive and encourage Americans to buy imports, producing a wider trade gap, economists said. 'If you take Trump at his word that the persistent trade deficit is an economic emergency, then you couldn't possibly endorse this,' said Benn Steil, director of international economics for the Council on Foreign Relations in New York. 'This is clearly pushing in the direction of further persistent, and indeed, higher trade deficits.' The White House insists the legislation that the president markets as 'One Big Beautiful Bill' - combined with deregulation and greater energy production - will reduce cumulative deficits by trillions of dollars and put the nation's 'finances on a healthier trajectory,' according to a report by Stephen Miran, the head of the White House Council of Economic Advisers. The legislation 'is going to deliver a historic budget deficit reduction by cutting waste, fraud, and abuse in mandatory spending and turbocharging economic growth to increase tax revenue,' said Kush Desai, a White House spokesman. But the White House math ignores the cost of extending the 2017 tax cuts, and its claims have drawn sharp criticism from several nonpartisan groups, including the Committee for a Responsible Federal Budget, which said the CEA analysis was 'based on fantasy growth assumptions.' The higher budget deficits that economists are forecasting could be the Achilles' heel of the president's effort to reshape global trade. In April, Trump declared 'a national emergency' as he unveiled the highest U.S. tariffs in more than a century, saying they were needed to counter unfair practices that cost American jobs. Treasury Secretary Scott Bessent has described the president's goal as curing chronic imbalances in the global economy that revolve around the United States and China. The United States has run an annual trade deficit every year since 1975, while China and a handful of other nations such as Germany, Japan, South Korea, Singapore and Taiwan typically enjoy a surplus. In effect, the current global economic system relies on the United States to act as the consumer of last resort and absorb the excess production of goods in countries like China. Beijing subsidizes production of many goods beyond what Chinese consumers can afford, helping propel exports. The lack of an adequate retirement system also compels the typical Chinese citizen to save for their nonworking years rather than spend today, which explains why consumption accounts for just 38 percent of gross domestic product in China. Americans, by contrast, consume more than they produce and invest more than they save: Consumption in the United States equals 68 percent of GDP. Imported goods and money make up the difference. The value of the dollar, which has generally been strong since the 2008 financial crisis, also contributes to chronic trade deficits by making American exports expensive for foreign buyers and making imports relatively cheap for Americans. Bessent acknowledges that the U.S., as well as China, needs to change. Last year, he advised then-candidate Trump on an economic plan that included driving the budget deficit down to 3 percent of GDP, less than half its current level. He told reporters last week that faster economic growth coupled with spending cuts would improve the deficit outlook. 'This status quo of large and persistent imbalances is not sustainable. It is not sustainable for the United States, and ultimately, it is not sustainable for other economies,' Bessent said in an April speech. Not all economists are convinced. Both Dean Baker of the Center for Economic and Policy Research, a left-of-center Washington think tank, and Doug Holtz-Eakin of the right-of-center American Action Forum, said the imbalances that trouble Bessent are not worrisome. 'I don't see the harm,' said Holtz-Eakin, who added that closing the trade deficit would require tougher action on the budget than the administration has proposed. Global imbalances also were more extreme in the past. In 2006, the U.S. current account, the broadest measure of the nation's international transactions, hit a record deficit of 6.3 percent of the economy. But it was less than half that figure from 2009 until the pandemic, according to the Commerce Department. Likewise, China's corresponding surplus was around 2 percent of GDP last year, down from a peak of 10 percent in 2007, according to the International Monetary Fund. There already have been some early signs of needed rebalancing. European governments, for example, have committed to increase spending on defense and infrastructure projects. Still, there are at least two reasons now to remake the lopsided global economy, other economists said. China's reliance on exports to fuel its recovery from a real estate bubble threatens to flood other markets with low-cost goods, costing workers in those countries their jobs. Both the Biden and Trump administrations have warned of a second 'China shock' akin to the emergence of Chinese manufacturing power in the early 2000s. With the U.S. imposing new tariffs, Chinese goods are being diverted to other markets. In the past year, the European Union, India and Canada have responded with their own new taxes on Chinese imports. China's trading partners are unlikely to tolerate an indefinite increase in that nation's dominance of global markets. Equally unsustainable is the outlook for the U.S. government's finances. The U.S. budget deficit last year hit 6.4 percent of total output - unusually high given that the economy was operating at or near full employment. CBO expects the deficit to hover around 6 percent for the next decade, evidence that import-hungry Americans will continue living beyond their means. Just since the pandemic, Washington has added nearly $12 trillion to the national debt, as much as all government borrowing between 1790 and 2012. The conflict between Trump's tax and trade policies mirrors what occurred during his first term. After passage of his 2017 tax cut, the budget deficit as a percentage of GDP widened from 3.1 percent in 2016 to 4.6 percent in 2019. The trade deficit also increased for the two years following the bill's passage, before the pandemic upended the economy. 'There is a disconnect, an incoherence between the stated desire of the administration to reduce and resolve global imbalances and what it's proposing to do with fiscal policy. The macroeconomic policies and trade policies are rowing in different directions,' said Richard Samans, a nonresident senior fellow at the Brookings Institution. To be sure, other forces could also affect how much the budget deficit sways the trade imbalance. The expected rise in the dollar's value, for example, could be muted if investors shy from the U.S. currency out of concern over White House policies. Trump's frequent remarks about replacing Federal Reserve Chair Jerome H. Powell with a supporter of lower interest rates, for example, have sparked widespread concern among global investors and may explain the dollar's decline of more than 11 percent this year, said economist Mary Lovely of the Peterson Institute for International Economics. 'It really depends on Trump. It really is about confidence and trust in the U.S. government and in the U.S. dollar,' she said. Even those who agree that global imbalances are a problem say the administration is using the wrong tools to address them. The president is relying on the highest tariffs since the 1930s to shrink the trade deficit, return manufacturing jobs to the United States and spur a 'blue-collar boom.' But the trade deficit is determined by broad economic forces such as the level of national savings, not individual trade barriers, according to most mainstream economists. Tariffs on key inputs such as steel also raise costs for businesses that use industrial metals, hurting prospects for factories that employ far more workers than the mills do, said Maurice Obstfeld, an economics professor at the University of California at Berkeley. 'We're going in exactly the wrong direction because we're increasing the fiscal imbalance, which is already dangerous, and we're harming the real economy through tariffs,' said Obstfeld, a former IMF chief economist. Related Content Lights! Camera! But not enough action in a fading, worried Hollywood. Facing entry-level job crunch, new grads question the value of a degree Dynamite outside a synagogue: Civil rights stories imperiled by federal cuts Sign in to access your portfolio
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24-06-2025
- Health
- Yahoo
How medical groups may preserve vaccine access — and bypass RFK Jr.
Professional medical societies, pharmacists, state health officials and vaccine manufacturers, as well as a new advocacy group, are mobilizing behind the scenes to preserve access for vaccines as Health Secretary Robert F. Kennedy Jr. works to upend the nation's decades-old vaccine system, according to public health experts. The groups are discussing ordering vaccines directly from manufacturers and giving greater weight to vaccine recommendations from medical associations. And they are asking insurance companies to continue covering shots based on professional societies' guidance instead of the federal government's, according to more than a dozen people familiar with the conversations, including some who spoke on the condition of anonymity to share private discussions. Subscribe to The Post Most newsletter for the most important and interesting stories from The Washington Post. The moves come as Kennedy has replaced members of the key federal vaccine advisory panel to the Centers for Disease Control and Prevention that decides which vaccines are recommended for whom and whether they'll be covered by insurance. Kennedy fired the 17-member committee earlier this month and handpicked eight new members, several of whom are vaccine critics. But the extraordinary effort to create parallel systems of recommending, and perhaps even providing, vaccines faces major challenges, and some of the more ambitious goals have yet to be ironed out. There is no guarantee that health plans will cover every shot without guidance from the CDC panel, known as the Advisory Committee on Immunization Practices, or ACIP. States, which determine school vaccine entry requirements, may make different decisions. And potential competing recommendations could sow confusion among doctors as well as patients if it becomes unclear which recommendations to follow. The impact of ACIP is wide-ranging. In addition to insurance coverage, its decisions - which must receive final approval from the CDC director - affect the ability of pharmacists to administer vaccines, as well as a government program ensuring roughly half of children in the United States can get vaccines free. Public health and medical experts have for months raised alarms over Kennedy's ascent to the nation's top health post, expressing concern over his lengthy history of disparaging vaccines. Kennedy, the founder of a prominent anti-vaccine group, secured enough Republican support for the position by pledging to protect the public health benefit of vaccination. But medical and public health experts argue the nation's vaccine system is beginning to fracture under Kennedy's leadership. Their efforts to create a nongovernmental vaccine system marks a significant escalation in strategy, reflecting the high degree of alarm within the mainstream medical and public health community about continued access to immunizations that have long been recommended by federal health officials. The American College of Physicians, one group involved in the talks, said Kennedy's recent changes to the ACIP and lack of transparency in the process 'puts at risk decades of progress in vaccine development, access, and public trust, and contributes to confusion and uncertainty.' If the panel departs from long-standing recommendations, 'we will need to look elsewhere for reliable information guided by the best-available evidence to guide the use of vaccines,' said Jason Goldman, the group's president, in a statement. HHS spokesperson Andrew Nixon said the agency and CDC 'remain committed to ensuring that vaccine guidance is rigorous, independent, and truly in service to the health of the American people - not corporate interests.' He called one of the coalition's leading organizations 'a self-appointed echo chamber masquerading as oversight.' 'Led by establishment insiders, it's less about integrity and more about salvaging the credibility of a public health bureaucracy that failed millions during the covid-19 pandemic,' Nixon said in a statement. 'ACIP will continue to be the statutory authority guiding immunization policy in this country.' The newly reconstituted ACIP is scheduled to hold its first meeting Wednesday and Thursday. The draft agenda no longer includes policy discussions that were scheduled for this month, such as a vote on who should get a coronavirus vaccine. Instead, last-minute items have been added that 'have long been cornerstones of vaccine falsehoods among vaccine skeptics,' Katelyn Jetelina, a California epidemiologist, wrote Friday in her weekly newsletter about infectious disease. A former leader of the anti-vaccine group Children's Health Defense - which Kennedy founded - is scheduled to give a presentation Thursday on the preservative thimerosal in some flu vaccines, according to two people who were told about the presentation and spoke on the condition of anonymity for fear of retaliation. Children's Health Defense CEO Mary Holland said that the official 'has no current role' with the group and was 'past president.' Its inclusion suggests the panel wants to revisit long debunked claims linking the preservative to autism. Kennedy has a history of pushing the discredited claim that vaccines cause autism. Thimerosal was added to some vaccines decades ago to prevent bacterial contamination in multi-dose vials. By the early 2000s, it had been removed or reduced to trace amounts in most childhood vaccines, with manufacturers increasingly using single-dose vials that did not require preservatives. It remains in some multi-dose influenza vaccines, according to the CDC. - - - The quest to vaccinate America The Vaccine Integrity Project, a recent initiative based at the University of Minnesota, is leading many of the discussions to explore alternatives with vaccine manufacturers, health insurers and medical associations. The project is consulting with, among others, the American Academy of Pediatrics, the American Academy of Family Physicians, the American College of Physicians, the American Pharmacists Association, the National Foundation for Infectious Diseases, as well as insurance providers. 'We've had discussions across the board from everyone across the vaccine enterprise, from [research and development] to the person who delivers the needle,' said Michael Osterholm, a University of Minnesota infectious-disease expert who advised President Joe Biden's transition team and helped launch the initiative. The project does not receive funding from industry; it has received an unrestricted gift from a foundation established by philanthropist Christy Walton, an heir to the Walmart fortune. ACIP, CDC and Kennedy have created an uncertain environment, and project leaders are bracing for what they say would be the worst: the removal of vaccines from the recommended CDC list of routine immunizations for children and adults. That list includes vaccines for chicken pox, measles and polio. 'Vaccine misinformation has increased in recent years, and that's a concern to me,' said Asa Hutchinson, the former Republican governor of Arkansas and a member of the Vaccine Integrity Project's steering committee. 'I think everyone's goal is to have accurate information for the public and have it scientifically based and to make sure that our public health infrastructure is strong.' Hutchinson, who led Arkansas amid the coronavirus pandemic, said he does not believe Kennedy thus far has changed vaccine policy beyond rollbacks on coronavirus shot recommendations. 'It remains to be seen as to how the newly formed ACIP is going to act,' he said. Political pressure on Kennedy could increase if his moves reduce access to routine vaccinations, public health experts said. 'The moment vaccines become harder to get for the schoolteacher and firefighter in Allentown, Pennsylvania, … or it's gotten expensive, that's where the politics of this changes,' said Ashish Jha, the White House covid-19 coordinator under the Biden administration. Two CDC scientists resigned after Kennedy's unilateral decision to remove coronavirus vaccination recommendations for healthy children and pregnant women and his firing of ACIP members. One told colleagues she felt she could no longer help vulnerable people. Another said she was stepping down because she is no longer confident that data on covid- 19 and other respiratory illnesses would be used objectively to set vaccine policy. - - - A complex web of vaccine access and coverage Introducing a new player into the nation's vaccine system promises to be complicated, given the patchwork of state laws and the federal government's traditional role. Many state laws governing school entry requirements and vaccination requirements for hospitals and health care workers are often tied to ACIP recommendations. There are nearly 600 references or citations related to ACIP in the laws or regulations of 49 states, according to an analysis by the Association of State and Territorial Health Officials. Some states are considering forming their own vaccine advisory groups. Officials from Maine, Rhode Island, Connecticut and New York are discussing a possible regional group for northeastern states, according to two state health officials who spoke on the condition of anonymity because talks are ongoing. Wisconsin said earlier this month it would continue to recommend the coronavirus vaccine because Kennedy-directed changes to CDC guidance 'were not made based on new data, evidence, or scientific or medical studies, nor was the guidance issued following normal processes.' But each state going its own way is not ideal. 'The biology of people is not different state to state,' said Anne Zink, an Alaska emergency room physician and member of the Vaccine Integrity Project. 'We should be looking to the major medical associations,' Zink said. Roughly 30 states' regulations tie the ACIP schedule to whether Americans can get a certain vaccine at the pharmacy counter. Major pharmacy associations are planning to send a letter in the coming days to health plans urging them to maintain coverage, according to Brigid Groves, the vice president of professional affairs at the American Pharmacists Association. They are also crafting draft emergency orders governors could issue allowing pharmacists to continue administering certain vaccines if the federal guidance were to change. Insurers cover vaccines that are on the CDC's immunization schedule, generally, even if they are considered 'shared clinical decision-making,' meaning children can get vaccinated if their parents and doctors agree. 'Health plans continue to follow federal requirements related to coverage of ACIP-recommended vaccines and will continue to support broad access to critical preventive services, including immunizations,' Tina Stow, a spokeswoman for AHIP, the major insurer lobby, said in a statement to The Washington Post. Recommendations of medical societies and scientific evidence will weigh on insurance coverage decisions, according to two people involved in the insurance industry who spoke on the condition of anonymity to detail sensitive discussions. 'Insurers are absolutely trying to find ways to cover services that are so widely understood as beneficial and proven,' said a former insurance industry executive who spoke on the condition of anonymity to be candid. 'I wouldn't want to be the first insurer to start to decline coverage for what are clearly incredibly important and valuable public health interventions.' - - - Lauren Weber contributed to this report. 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Yahoo
18-06-2025
- Business
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Tax law might be coming for your free office snacks
A change in tax law may make companies rethink a popular workplace perk: food and drink. Starting in 2026, companies will no longer be able to deduct the cost of on-site cafeterias or takeout for workers who stay late. And accountants say the change probably applies to office snacks and coffee, too. Subscribe to The Post Most newsletter for the most important and interesting stories from The Washington Post. Though the cost of such staff freebies is relatively small in the grand scheme of employee benefits, the potential change in tax law comes as many businesses are trimming expenses in the face of tariffs and economic uncertainty. 'Companies are in cost-cutting mode, and if they don't have some incentives, they will continue to cut back,' said Ellen Kossek, an emerita professor of management at Purdue University. 'We've seen this in Silicon Valley,' she added, referencing the onetime center of such upmarket perks as unlimited vacation time, on-site hair stylists, deluxe cafeterias and coffee bars. Because food can be a powerful motivator - especially at a time when many companies are abandoning remote and hybrid work - Kossek said companies' ratcheting down of staff offerings could affect the broader corporate culture and return-to-office initiatives. 'If you have to pay for your food, it's one less reason to come to the office.' U.S. tax law allow companies to deduct certain business costs, such as insurance, rent and office supplies, from their income before they pay taxes. But meals are treated differently, depending on the category. For instance, a company can deduct 50 percent of the restaurant bill for taking a client or a job candidate to lunch under current law. But a provision that allows companies to deduct cafeteria costs or any meals they provide in the workplace 'for the convenience of the employer' is poised to sunset in 2026. If it does, U.S. businesses would be looking at an additional $300 million a year in taxes, based on estimates by the Joint Committee on Taxation. With congressional Republicans racing to advance President Donald Trump's tax and immigration bill and extend his 2017 tax cuts, some accountants had expected lawmakers to retain the workplace meal deduction. But the House version made an exception only for the restaurant industry, according to Christa Bierma, vice chair of the American Institute of Certified Public Accountants' committee on employee benefits. Unless the Senate makes further changes to the legislation, which tax experts say is unlikely, restaurants will continue to get the write-off. 'For some industries, it is culturally demanded,' Bierma noted of the exception. 'Nobody would want to be the first one to say we're not going to do this anymore.' Ending the tax advantage makes philosophical sense for conservatives, said Tax Foundation analyst Alex Muresianu. Under current rules, a company-paid lunch is essentially a form of tax-free income. And if the employee isn't paying tax, the company should, Muresianu said. 'We want to tax all employee compensation the same,' he said. 'And instead of wages, having employer-provided meals in various contexts is a form of nonwage compensation.' That thinking, though, doesn't align with other provisions in the Republican bill, which treats overtime wages and tips as tax-free. Trump is pushing senators to pass his tax bill by July 4 despite warnings from many economists and some lawmakers about the projected price tag; the nonpartisan Congressional Budget Office expects it to expand the deficit by $2.4 trillion over a decade. In 2017, when lawmakers opted to sunset the in-house meal deduction in eight years, the coronavirus pandemic had not yet driven millions of workers home from their desks. Today, some management experts question the wisdom of removing a business incentive at a time when many workers are chafing at RTO mandates. 'I think the corporate culture will change in several ways,' said University of Manchester professor Cary Cooper, who has researched hybrid work arrangements. Free food can be a powerful motivator, he said. 'If they're taking that away … or minimizing the quality of the food being provided - and there will be companies that will do that - you're not going to motivate people to return to the office.' Cooper suggested that senators consider extending the deduction as they reshape the tax bill. Without a delay, he foresees repercussions for businesses that need employees on-site, such as hospitals. 'In our day and age, I think it's just silly. I don't know why you would want to change the law in that direction at all.' Last summer, Bierma's committee of CPAs submitted a long list of questions and suggestions to the IRS seeking guidance on how companies should plan for the change. It hasn't received an answer. The law clearly removes tax advantages for company cafeterias - businesses can no longer deduct the cost of food, beverages or operations, which are now fully or partly deductible. Also out are meals that employers might provide in the workplace, such as dinner for staffers who stay beyond their shifts. But that leaves questions about more modest niceties. Accountant Richard Pon, who counts law firms and retailers among his clients, is convinced that the deduction will also go away for break-room staples such as coffee, fruit, chips and granola bars. 'Just having a small kitchen … some people will take the position that's not an eating facility. That's not a cafeteria,' he said. 'I think the position of the IRS might say that's an eating facility, no matter how small it is.' Related Content Russian attack destroys Kyiv building as Trump avoids talk of new sanctions Field notes from the end of life: My thoughts on living while dying He's dying. She's pregnant. His one last wish is to fight his cancer long enough to see his baby. Sign in to access your portfolio
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06-06-2025
- Politics
- Yahoo
Musk used X to boost Trump. Now he's wielding it against him.
Correction: A previous version of this article incorrectly stated the number of followers an account called DogeDesigner had on X. It has 1.4 million followers. - - - Subscribe to The Post Most newsletter for the most important and interesting stories from The Washington Post. For almost a year, Elon Musk marshaled the full force of X, his $45 billion social media platform, to boost Donald Trump's political fortunes and second presidency. On Thursday, as the two men publicly fought in a flurry of furious online posts, Musk revealed X to be a double-edged sword. Musk spent hours firing off mocking memes, curt put-downs and explosive allegations to his 220 million followers, just as he did during Trump's candidacy and as a member of his administration. Only this time, the target was Trump himself, not the president's critics. The attack deployed tactics familiar from Musk's many previous online battles. He dredged up old Trump tweets to suggest hypocrisy. He amplified posts from others critical of Trump. He accused the president of 'an obvious lie' about the cause of their falling-out and blasted him for 'ingratitude' for Musk's political support, claiming that 'without me, Trump would have lost the election.' As Trump lobbed disparaging posts back from his own social media platform, Truth Social, Musk also turned to a tactic he has used against others who have crossed him: insinuations of personal scandal. 'Time to drop the really big bomb,' Musk posted. Trump 'is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT!' The tech mogul's about-face sent shock waves through X, the social network formerly known at Twitter that Musk acquired in 2022. His attack on Trump tested the loyalty of politicians and influencers active on the site, who scrambled to choose sides. And it set up a titanic political battle for the attention era: A pair of very online billionaires duking it out in public, each with his own social network and millions of acolytes ready to amplify his every post. Thursday's online drama underscored that while Musk's stewardship of X made it into a powerful tool for his allies and the conservative movement, he feels free to wrench it in whatever new direction he pleases. When he acquired Twitter, Musk drove some users and advertisers away from the platform by putting his personal views ahead of business concerns, loosening speech rules and reinstating accounts banned for harassment or spreading misinformation. His fight with Trump proved again that he is willing to risk an exodus of users - this time from the right - by using the platform as a bully pulpit. Trump commands an actual military, but Musk oversees the larger digital horde. He has 220 million X followers, while Trump has 100 million on X and another 10 million on Truth Social, where he has lately become more prolific than he ever was on Twitter. Musk also controls X's moderation policies and its algorithm, both of which he has used at times to boost his own reach and silence his critics. Musk's power to direct attention on X has helped drive the emergence of an ecosystem of pseudonymous conservative political and tech influencers. Many have built followings in the millions on X by praising Musk, denigrating his rivals and trumpeting his agenda. They've been rewarded with amplification from Musk and a cut of X ad revenue. All those advantages were arrayed in Trump's favor after Musk endorsed his candidacy on X less than an hour after Trump survived an attempted assassination in July. Musk donned a MAGA hat in his profile image, held an hours-long live audio event on X with Trump and posted fake AI-generated images of Democratic candidate Kamala Harris in communist regalia. On more than one occasion, pro-Harris accounts found themselves throttled or temporarily suspended, leading some Democrats to cry foul. As Musk's U.S. DOGE Service, or Department of Government Efficiency, swept through Washington in February at Trump's behest, X became a digital command center of the new administration. Musk used it to amplify claims of waste and corruption, some of them unfounded, at the agencies and programs he targeted for elimination. He baited critics with memes of himself as the Godfather and polled his followers on what DOGE should cut next. Now it's Trump that Musk is trolling, after ending his government service a long way short of his stated goal of cutting $2 trillion in federal spending. He sent warning shots on Tuesday, calling Trump's massive tax and immigration bill - the president's top domestic priority - a 'disgusting abomination.' The conflict escalated in a hurry on Thursday after Trump told reporters in the Oval Office that his 'great relationship' with Musk might be over. Over the following hours, Musk accused Trump and other Republican leaders of betraying their principles and approvingly reposted criticisms of them from other accounts. That can have ripple effects across X as users vie to craft posts that will win a reply or amplification from Musk that can boost their own followings. At one point Musk posted a poll asking his 220 million followers if it was time to 'create a new political party in America that actually represents the 80% in the middle.' Six hours into the 24-hour poll, the votes leaned heavily toward 'Yes.' Traffic to X surely spiked on Thursday as political and tech insiders became glued to the conflict and citizens were left to wonder what it meant for the world's richest person to be at war with its most politically powerful. How the feud will affect Musk's influence and business empire is less certain. Tesla and SpaceX, his most valuable companies, depend heavily on government regulation and contracts, making them vulnerable to attacks by Trump and his administration. Tesla stock fell Thursday as investors appeared to fear retribution. Public spats between influencers are great for engagement on social platforms. But if the acrimony continues, Musk may have to reckon again with an exodus of users repelled by his politics. His embrace of Trump sent liberals scurrying to Meta's Threads and upstart Bluesky. His split with the president could give Trump an opening to lure more conservatives to Truth Social. On Thursday, some X influencers appeared to have calculated they had better prospects by sticking with Musk. An account called DogeDesigner with 1.4 million followers posted that Musk 'sacrificed a lot for Trump' and deserved better treatment. Just last week, Musk had sent it a heart emoji for a post promoting his alliance with the president. Another account called Shibetoshi Nakamoto mused, 'can i finally say that trump's tariffs are super stupid.' In a battle between Musk and Trump, 'My money's on Elon,' conservative commentator Ian Miles Cheong wrote, adding that 'Trump should be impeached and Vance should replace him.' Musk reposted it to his followers, adding only: 'Yes.' Related Content To save rhinos, conservationists are removing their horns Donald Trump and the art of the Oval Office confrontation Some advice from LGBTQ elders as WorldPride kicks off amid fears
