Trump one step closer to overhauling US Tax
In the US, the Senate has approved Donald Trump’s sweeping tax overhaul, bringing him one step closer to the first legislative victory of his presidency. At the heart of the bill is a significant cut to corporation tax from the current 35% to as low as 20%. There are also cuts to the higher rates of income tax as well as making some changes to middle income tax rules. Republicans have been in contention over the potential for the cuts to increase the overall level of national debt, however, the hope will be that the boost to economic growth will more than offset the expected loss in tax receipts. The bill will now need to be merged with separate legislation from the House of Representatives, a process that will begin this week.
For the first time since the Brexit referendum, there appeared to be progress in the negotiations between Britain and the European Union (EU). With Theresa May submitting to future payments of approximately £44bn, the EU is now more willing to progress with other major issues and ultimately, trade negotiations. However, a potential stumbling block this week was the agreement on the Northern Ireland border, where the Irish government are pushing for a firm commitment from the UK. The DUP torpedoed Theresa Mays negotiation with the EU by rejecting the offer. Nevertheless, the Pound has rallied on the hope that progress is now being made, although volatility in the currency is likely to remain as long as the negotiations continue.
Bitcoin has once again been making headlines after hitting $11,000 last week. The cryptocurrency has risen from under $1,000 at the beginning of the year and seen a 100% gain since mid-November. The extraordinary rise and extreme volatility of the cryptocurrency market has now warranted the attention of central bankers and regulators. Supporters and cynics are becoming ever more polarised over the future of the technology and intrinsic value of the “coins”. A likeness has been drawn between the rise of cryptocurrencies and Tulip-mania in Holland during the seventeenth century. However, followers believe that the future of money and payment methods will be done through the block chain technology that sits behind Bitcoin and other cryptocurrencies. Nevertheless, given the extreme price movements it is likely that many more headlines will be written on the progress of this new technology.
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