As gas prices continue rising across the United States, it is becoming more clear that – particularly for lower-income Americans – the meager benefits of President Donald Trump’s tax cuts will be swallowed by increases at the pump.
Whether or to what extent Trump’s policies are to blame is open for debate, but the reality is that heading into this year’s midterm elections, one of the Republican party’s biggest talking points could be losing what little power it might have had in the beginning.
The Bureau of Labor Statistics compiles data looking at how much households spend on gas. On average in 2016, consumers spent the equivalent of a bit over 3 percent of their household incomes on gas. That wasn’t uniformly the case; wealthier consumers spent a lower percentage of their incomes on gas even as they bought more of it. The highest percentage spent was by middle-income Americans.
A gallon of gas currently costs about 78 cents more than the 2016 average of $2.14, and if this increase holds, the Post notes that Americans will spend on average about $700 more on gas this year.
Viewing this increased spending on gas alongside Trump’s tax cuts shows just how quickly the extra cash realized by lower- and middle-income Americans will disappear:
The Tax Policy Center calculated how much people in various income groups would be expected to see in federal tax cuts thanks to the new tax law passed last year. In many cases, the expected cuts are minor. If we compare those expected cuts to how much more a household might pay in gas costs,* using the increase from Trump’s first week in office until now, the results are remarkable.
Those in the bottom 20 percent of income-earners will pay three or four times more in higher gas prices than they’ll get back in tax cuts. Those in the next highest quintile of incomes will see a wash — getting back about as much as they pay in higher gas prices.
Coca-Cola Considering Marijuana Infused Drinks Company Confirms
The Coca-Cola Co., the world’s largest beverage maker, is looking at a line of CBD beverages, the company confirmed Monday.
“Along with many others in the beverage industry, we are closely watching the growth of nonpsychoactive CBD as an ingredient in functional wellness beverages around the world,” Coca-Cola spokesman Kent Landers said in a statement.
“The space is evolving quickly. No decisions have been made at this time,” he said.
A report from Bloomberg said the company also is in talks with Aurora Cannabis to develop the line, but neither Coca-Cola nor Aurora would confirm this.
Aurora’s stocks, which trades on on the Toronto Stock Exchange under the ticker symbol ACB.TO, was up around 14% on the news in morning trading. Coca-Cola (KO.N) was little changed.
Soda manufacturers have been looking for new opportunities in the wake of falling sales as consumers turn away from sugary soft drinks.
Aurora spokeswoman Heather MacGregor said in an email that Aurora plans to enter the beverage space and is open to partnerships.
“Aurora has expressed specific interest in the infused beverage space, and we intend to enter that market,” she wrote.
The CBD beverage boom comes as prices fall for water-soluble CBD isolate. The isolate can now be had for about $20 a gram, depending on quality and size of an order.
That makes CBD an affordable ingredient to add to drinks, though it’s unlikely any CBD producers currently could handle the kind of volume the global beverage giant would require.
Why NAFTA Works Amazing
NAFTA created the world’s largest free trade area of 450 million people. It’s an economic powerhouse of $20.08 trillion, as measured by gross domestic product. It links the economies of the United States ($18.5 trillion), Canada ($1.67 trillion), and Mexico ($2.3 trillion). NAFTA’s trade area is greater than the economic output of the 28 countries in the entire European Union.
1. Quadrupled Trade
Between 1993-2017, trade between the three members quadrupled from $297 billion to $1.17 trillion. That boosted economic growth, profits, and jobs for all three countries. It also lowered prices for consumers.
During that time, the United States increased its exports of goods to the other two from $142 billion to $525 billion. That’s a third of its total exports. Canada ($282 billion) and Mexico ($243 billion) were the top two U.S. export markets in 2017. Imports from Canada ($300 billion) and Mexico ($314 billion) increased from $151 billion in 1993 to $614 billion. That’s 26 percent of total U.S. goods imports.
NAFTA boosted trade by eliminating all tariffs between the three countries. It also created agreements on international rights for business investors. That reduced the cost of commerce. It also spurs investment and growth, especially for small businesses.
2. Lowered Prices
Lower tariffs also reduced import prices. That also lessened the risk of inflation and allowed the Federal Reserve to keep interest rates low.
That’s especially important for oil prices since America’s largest import is oil. The U.S. imported $144.2 billion in oil from Mexico and Canada. Thanks to greater U.S. shale oil production, this figure was down from $157.8 billion in 2007. NAFTA reduced U.S. reliance on oil imports from the Middle East and Venezuela. It was especially important when the U.S. banned oil imports from Iran. Why? Mexico and Canada are friendly countries. Other oil exporters, such as Venezuela and Iran, use oil as a political chess piece.
For example, both started selling oil in currencies other than the petrodollar.
NAFTA lowered food prices in much the same way. Food imports totaled $39.4 billion in 2013, up from $28.9 billion in 2009. It lowered the prices of fresh vegetables, chocolate, fruit (except bananas), and beef.
3. Increased Economic Growth
NAFTA boosted U.S. economic growth by as much as 0.5 percent a year. The sectors that benefited the most were agriculture, automobiles, and services.
U.S. farm exports to Canada and Mexico grew 156 percent. That’s compared to a 65 percent increase in farm exports to the rest of the world. Farm exports to Canada and Mexico alone were greater than exports to the next six largest markets combined. Total farm exports were $39.4 billion in 2015.
NAFTA increased farm exports because it eliminated high Mexican tariffs. Mexico is the top export destination for U.S. beef, rice, soybean meal, corn sweeteners, apples, and beans. It is the second largest export destination for corn, soybeans, and oils.
NAFTA modernized the U.S. auto industry by consolidating manufacturing and driving down costs. Most cars made in North America now have parts sourced from all three countries. The increase in competitiveness allows the industry to fend off Japanese imports. Mexico exports more cars to the United States than Japan. Before the 2008 recession, Japan exported twice as many as Mexico. By 2020, Mexico will manufacture 25 percent of all North American cars.
NAFTA boosted U.S. service exports to Canada and Mexico from $25 billion in 1993 to a peak of $106.8 billion in 2007. The recession hit financial services hard, so services haven’t quite recovered. By 2009, they had only risen to $63.5 billion. By 2012, service exports had improved to $88.6 billion.
More than 40 percent of U.S. GDP is services, such as financial services and healthcare. NAFTA eliminates trade barriers in most service sectors, which are regulated. NAFTA requires governments to publish all regulations, lowering hidden costs of doing business.
4. Created Jobs
NAFTA exports created five million new U.S. jobs. Most of those jobs went to 17 states, but all states saw some increases. U.S. manufacturers added more than 800,000 jobs between 1993 and 1997. That’s because manufacturers exported $487 billion in 2014. It generated $40,000 in export revenue for each factory worker.
Even imports from NAFTA partners created jobs. That’s because nearly 40 percent of U.S. imports from Mexico originated with American companies. They designed the products domestically, then outsourced some portion of the process in Mexico. Without NAFTA, they would have gone to China. They may not have been created at all. (Source: “NAFTA, 20 Years Later,” Knowledge@Wharton, February 19, 2014.)
5. Increased Foreign Direct Investment
Since NAFTA was enacted, U.S. foreign direct investment in Canada and Mexico has more than tripled. It reached $452 billion by 2012 (latest statistics available). That boosted profits for U.S. businesses by giving them more opportunities to develop, and markets to explore.
Canadian and Mexican FDI in the United States grew to $240.2 billion, up from $219.2 billion in 2007. That’s additional investment went mostly to U.S. manufacturing, insurance, and banking companies.
NAFTA protected intellectual properties. It helped innovative businesses by discouraging pirating. It boosted FDI because companies know that international law will safeguard their rights. NAFTA reduced investors’ risk by guaranteeing they will have the same legal rights as local investors. Through NAFTA, investors can make legal claims against the government if it nationalizes their industry or takes their property by eminent domain.
6. Reduced Government Spending
NAFTA allowed firms in member countries to bid on all government contracts. That created a level-playing field for all companies within the agreement’s borders. It cut government budget deficits by allowing more competition and lower-cost bids. (Source: “Quantification of NAFTA Benefits,” USTR. “NAFTA Triumphant: Assessing Two Decades of Gains,” U.S. Chamber of Commerce, October 27, 2015. “NAFTA Section Index,” USTR.)
Facebook Will Now Require Social Security Numbers
Facebook users in the U.S. who want to buy certain ads will now have to provide the last four digits of their Social Security number.
It is all about confirming a buyer’s identity and attaching a “paid for by” tag to the ads, according to WPTV.
Users who want to buy certain ads will have to identify themselves by providing the last four digits of their Social Security number.
Those who want to buy these kinds of ads will also need to give Facebook a picture of a government-issued ID and provide a U.S. mailing address.
Facebook says it will use all this information to confirm the ad buyer’s identity and then delete it.
The company also says approved ads will be identified with a “paid for by” tag.
The new guidelines for political ads comes as the social media giant is reeling from revelations related to alleged Russian election interference and the improper accessing of its users data.
This month, the House Intelligence Committee released a cache of more than 3,000 ads purchased by the Internet Research Agency, a pro-Kremlin group that purchased political advertising on Facebook in an attempt to influence the 2016 U.S. presidential election, according to Dow Jones Newswires.
Facebook CEO Mark Zuckerberg took his apology tour to Brussels on Tuesday.
He faced questions about the scandal over improper use of millions of Facebook users’ data.
He defended his company over the misuse of data by the British company Cambridge Analytica, a consultancy that worked on the Trump presidential campaign.
The Cambridge Analytica scandal affected up to 87 million users and prompting several apologies from Zuckerberg and generated calls for regulation and for users to leave the social network.
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