Trudeau Touts Vaccine Deals as Canada Notches New Daily Record in COVID 19 Cases

Prime Minister Justin Trudeau is trying to offer Canadians modest hope about progress in testing and vaccine development after Canada notched an all-time high of new COVID-19 cases in a day. Trudeau told a news conference Friday that the government is spending $214 million towards the development of COVID-19 vaccines, signing deals with two Canadian biotech firms. But even as he touted Canada’s portfolio of potential vaccines, Trudeau warned it’s unlikely that any of these candidates will be ready to distribute to Canadians this year or early next year. It’s reasonable to expect that vaccines will start to roll out at some point in 2021, said Trudeau, but even then, supply will be limited, and high-risk populations will be prioritized for inoculation. “We are hopeful that the vaccines will arrive yesterday, but they won’t,” said Trudeau. “There’s still a number more months of work to do.” Trudeau said his government signed a $173-million contract with Quebec’s Medicago to secure the rights to buy 76 million doses of its vaccine, should it meet health and safety standards. The funding will also be used to establish a production facility in Quebec City, he said. Ottawa is also investing $18.2 million in a potential vaccine from British Columbia’s Precision NanoSystems. Meanwhile, the National Research Council is spending $23 million to support other Canadian vaccine initiatives, Trudeau said. The prime minister said Canada has signed six agreements with a number of companies taking part in the global race to produce a safe and effective vaccine for COVID-19 . Two more American vaccine makers, Moderna and Pfizer, have asked Health Canada to review their products, which are undergoing clinical trials. The prime minister also said Canada has acquired “hundreds of thousands” of rapid test kits from medical company Abbott. Trudeau said his government has started distributing the kits to provinces and territories, and it will be up to those authorities to decide how to deploy them. But new innovations and investments will only prove effective in the fight against the COVID-19 contagion if Canadians do their part to curb the spread, Trudeau said. Canada’s chief public health officer told reporters Friday that a record 2,788 new illnesses were reported Thursday, bringing the country’s total count to just over 209,000 COVID-19 cases, including more than 9,800 deaths. Dr. Theresa Tam said authorities need the public’s help to rein in infection rates through practices such as limiting in-person contacts, wearing masks and physical distancing. Meanwhile, a Quebec health institute released projections Friday suggesting that province’s health system should have the capacity to handle the number of COVID−19 patients expected to need care in the next four weeks. Quebec is reporting 905 new cases of COVID-19 and 12 more deaths from the illness. Ontario also reported 826 new cases of COVID-19 on Friday, and nine new deaths linked to the virus. Manitoba reported a total of 163 new infections Friday, most concentrated in Winnipeg, and the positivity rate is now up to 6.5 percent. The province also said a man in his 80s is the latest death linked to an outbreak at Winnipeg’s  Parkview Place that has killed a total of 15 people. New Brunswick is reporting two new cases of COVID-19 in the Campbellton region, which is one of two areas that saw significant outbreaks two weeks ago. Newfoundland and Labrador is asking passengers who travelled on Air Canada Flight 7484 from Toronto to Deer Lake on Oct. 12 to get tested in relation to a new COVID−19 case announced on Thursday. By Adina Bresge

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Biden and Trump Offer Competing Tax Proposals, but Both Ignore Economic Reality

In a world in which economic reality mattered to politicians, grandiose spending plans coupled with soaring government debt would pretty much preordain grim tax policy. But we don't live in that world. In ours, tax and spending proposals are crafted based on their appeal to target audiences of voters, with no regard for balancing books or averting financial catastrophe. With that in mind, it's clear that there are significant differences between the plans that Donald Trump and Joe Biden harbor for our money. Basically, Trump plans to steal less of other people's cash then Biden does, though neither has any serious suggestions for paying for their spending schemes. First, let's note that the president has been very vague about his tax plans, offering little beyond broad promises of more tax cuts in addition to those provided by the 2017 Tax Cuts and Jobs Act (TCJA). "Without further details or clarification, it is difficult to fully analyze President Trump's second term tax policy agenda," cautions the Tax Foundation. "Broad themes of the president's agenda include providing tax relief to individuals and tax credits to businesses that engage in desired activities, while the status of expiring TCJA provisions and tariffs seems uncertain." "We're left with a handful of vague ideas and bullet-point descriptions about various tax cuts the president would like to pursue if he's re-elected," agrees Kiplinger. The financial publication adds that we should "expect the president to seek permanent status for at least some of the provisions in the Tax Cuts and Jobs Act (TCJA) of 2017 that lowered taxes for individuals. Right now, most of those tax cuts are set to expire after 2025." The TCJA, then, is probably our best insight into Trump's intentions. The law dropped the corporate tax rate from 35 percent to 21 percent. It also cut personal income taxes for a majority of Americans. "About 65 percent of households paid less in individual income taxes in 2018 as a result of the TCJA," reports the Tax Policy Center, a project of the Urban Institute and the Brookings Institution. "About 6 percent paid more. The rest paid about the same." "Experts are divided on whether the tax law was a good idea. But there is little disagreement on this core point: Most people got a tax cut," notes The New York Times. Many of the tax reductions of the TCJA are set to expire in 2025, however. The expiration date was inserted in order to prevent a Senate filibuster by Democrats who opposed the legislation. As a result, a reelected President Trump is expected to try to extend the effects of the law, and that may well constitute the bulk of his tax policy. Joe Biden, by contrast, has been far clearer than Trump about his tax plans—and about his intention to extract more money from Americans. "Democratic presidential nominee Joe Biden would enact a number of policies that would raise taxes on individuals with income above $400,000, including raising individual income, capital gains, and payroll taxes," say Tax Foundation analysts. "Biden would also raise taxes on corporations by raising the corporate income tax rate and imposing a corporate minimum book tax." "Biden's tax plan would yield combined top marginal state and local rates in excess of 60 percent in three states: California (62.64 percent), Hawaii (60.34 percent), and New Jersey (60.09 percent)," the Tax Foundation adds. Biden "wants to raise the highest personal income rate back up to 39.6% (it was lowered to 37% by the 2017 tax reform law), cap itemized deductions for wealthier Americans, limit 'like-kind exchanges' by real estate investors, and phase-out the 20% deduction for qualified business income for upper-income taxpayers," agrees Kiplinger. "He won't raise taxes for anyone making less than $400,000, though." Biden proposes reducing taxes for lower-income Americans, though not with broad TCJA-style rate cuts. Instead, the Democratic challenger favors targeted breaks, including tax credits and debt forgiveness intended to benefit parents, students, seniors, and other favored groups and to generally incentivize behavior he wants to encourage. It's necessary, though probably pointless, to emphasize that neither Trump's nor Biden's tax plans come close to paying for the federal government's anticipated spending spree in the years to come. "Biden's plan would raise tax revenue by $3.05 trillion over the next decade on a conventional basis," assesses the Tax Foundation. "When accounting for macroeconomic feedback effects, the plan would collect about $2.65 trillion the next decade." It's hard to assign an equivalent revenue number to the president's proposals given the dearth of details, but his emphasis on tax cuts means it's certainly less than Biden's take. But Trump proposed non-stop deficit spending even before the government started throwing money around to offset jobs lost and businesses closed during the pandemic, according to the Congressional Budget Office (CBO). More tax cuts and continuing deficits mean growing debt. Biden proposes $7.74 trillion in increased federal spending, tallies the Washington Post's Robert J. Samuelson. That's on top of $13 trillion in deficits over the next decade (calculated before coronavirus spending). That inevitably results in even greater debt beyond what's already forecast. "By the end of 2020, federal debt held by the public is projected to equal 98 percent of GDP," the CBO warned in September: The projected budget deficits would boost federal debt to 104 percent of GDP in 2021, to 107 percent of GDP (the highest amount in the nation's history) in 2023, and to 195 percent of GDP by 2050. High and rising federal debt makes the economy more vulnerable to rising interest rates and, depending on how that debt is financed, rising inflation. The growing debt burden also raises borrowing costs, slowing the growth of the economy and national income, and it increases the risk of a fiscal crisis or a gradual decline in the value of Treasury securities. This is an appropriate place at which to recognize that Libertarian presidential candidate Jo Jorgensen favors cutting taxes and government spending. "Taxes are never voluntary—they are always paid under threat of punishment," her campaign website points out. "As president, I will work tirelessly to slash federal spending, make government much, much smaller, and eliminate the federal income tax, so you can keep what you earn." Jorgensen promises to "block any new borrowing" and to "encourage baseline budgeting. Instead of assuming an increase, we start at zero every year, and then we decide what is vital." The Libertarian candidate's proposals are light on details, though she offers the rare acknowledgment that taxes and spending involve important tradeoffs, and that not everything people desire is affordable. But we don't live in a world where economic reality has much popularity, which may be why the only presidential candidate to discuss taxes and spending as linked issues is languishing in the polls at maybe 3 percent. Instead, Americans are at each other's throats over two candidates whose financial proposals promise everything their supporters could want without reference to the real world.

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Joe Biden's Economic Policies Would Cost the Economy 4.9 Million Jobs by 2030, According to a New Study

"Nobody making under 400,000 bucks would have their taxes raised, period, bingo," said Democratic presidential nominee Joe Biden in May. It's a claim he has made repeatedly throughout the course of his campaign. If he takes the White House and sticks to his present platform, it appears to be true. But that slogan leaves out the broader economic implications of some of Biden's plans, according to a study from the Hoover Institution at Stanford University. The core tenets of Biden's economic agenda are to increase the corporate tax rate as well as taxes on high-income earners, to undo many of President Donald Trump's regulatory reforms, and to implement new subsidies for renewable energy and the health care market. The researchers calculate that over the next decade, these changes would prompt the economy to shed 4.9 million jobs and the gross domestic product to drop $2.6 trillion. In the year 2030 alone, they say, U.S. consumption would be down $1.5 trillion and median-income households would make $6,500 less.  Let's begin with the first point, which has been at the center of Biden's pitch to the American people. High-earning households would see an uptick in payroll taxes, something the candidate has been clear about. But he could also hike the corporate tax rate from 21 percent to 28 percent, and that's likely to have a more significant effect on the economy. Before the Tax Cuts and Jobs Act of 2017, America's corporate rate was 35 percent—one of the highest in the world. Many Democrats derided the steep cut to 21 percent, but it put the U.S. in a more moderate bracket. The average statutory corporate tax rate in Europe is 20.27 percent; Sweden, often hailed as a democratic socialist model, employs a corporate tax rate of 22 percent. Meanwhile, a Biden administration would pivot back to the regulatory approach seen under former President Barack Obama. The researchers hone in on Obama's stringent health care rules, which effectively barred "low cost, high deductible, limited coverage health insurance plans," and his telecom regulations, which were supposed to establish net neutrality. "Forcing people to buy the highest quality and most expensive product, or none at all," they write, "lowers economic efficiency, or redistributes from consumers to the sellers of the expensive products, or both." The former vice president would further subsidize individual health insurance plans to a greater degree than the government did under Obama. (Biden has promised to implement a "public option," a step further than Obama went.) He also wants to tackle energy and the environment with an array of subsidies and mandates; the former will impose new costs on taxpayers, the latter on employers. The researchers conclude that their projections are "conservative." Apparently, direct tax hikes don't tell the entire story.

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U.S. Budget Deficit This Year Of $3.1 Trillion More Than Doubles Past Record

Courthouse News The U.S. government’s budget deficit skyrocketed during the fiscal year 2020 with more than $3.1 trillion in the red, according to a report released Friday by the Treasury Department.  This fiscal year, which ended Sept. 30, saw a record budget deficit more than three times that of the 2019 deficit, following a massive federal spending surge related to coronavirus-driven economic relief efforts. Last year, the budget deficit – which is the gap between government spending and tax revenue – was $984 billion. The report released jointly by the White House and the Treasury Department on Friday shows that government spending amounted to more than $6.5 trillion this year, which is up from $4.4 trillion in 2019. It also shows that the 2020 deficit represents 15.2% of total gross domestic product, the highest percentage since World War II. More

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