Day: October 29, 2017

Trump Tax Overhaul Under Intensifying Fire as Congress Readies Bill

President Donald Trump’s plan for overhauling the U.S. tax system faced growing opposition from interest groups on Sunday, as Republicans prepare to unveil sweeping legislation that could eliminate some of the most popular tax breaks to help pay for lower taxes.

Republicans who control the U.S. House of Representatives will not reveal their bill until Wednesday. But the National Association of Home Builders, a powerful housing industry trade group, is already vowing to defeat it over a change for home mortgage deductions, while Republican leaders try to head off opposition to possible changes to individual retirement savings and state and local tax payments.

Trump and Republicans have vowed to enact tax reform this year for the first time since 1986. But the plan to deliver up to $6 trillion in tax cuts for businesses and individuals faces challenges even from rank-and-file House Republicans.

House and Senate Republicans are on a fast-track to pass separate tax bills before the Nov. 23 U.S. Thanksgiving holiday, iron out differences in December, send a final version to Trump’s desk before January and ultimately hand the president his first major legislative victory. Analysts say there is a good chance the tax overhaul will be delayed until next year.

The NAHB, which boasts 130,000 member firms employing 9 million workers, says the bill would harm U.S. home prices by marginalizing the value of mortgage interest deductions as an incentive for buying homes. The trade group wants legislation to offer a $5,500 tax credit but says it was rebuffed by House Republican leaders.

“We’re opposed to the tax bill without the tax credit in there, and we’ll be working very aggressively to see it defeated,” NAHB chief executive Jerry Howard told Reuters.

Republicans warned that the Trump tax plan is entering a new and difficult phase as lobbyists ramp up pressure on lawmakers to spare their pet tax breaks.

“When groups start rallying against things and they succeed, everything starts unraveling,” Senator Bob Corker, a leading Republican fiscal hawk, told CBS’ Face the Nation.

Anxiety in high-tax states

One of the biggest challenges involves a proposal to eliminate the federal deduction for state and local taxes (SALT), which analysts say would hit upper middle-class families in high income tax states such as New York, New Jersey and California. The states are home to enough House Republicans to stymie legislation.

The top House Republican on tax policy gave ground over the weekend, saying he would allow a deduction for some local taxes to remain.

“We are restoring an itemized property tax deduction to help taxpayers with local tax burdens,” House Ways and Means Committee Chairman Kevin Brady said in a statement.

But the gesture appeared to do little to turn the tide of opposition to SALT’s elimination.

“I’m not going to sign onto anything until the full package is fully analyzed by economists,” Representative Peter King of New York told the Fox News program Sunday Morning Futures. “The fact that we’re getting it at the eleventh hour raises real issues with me,” he added.

A lobby coalition representing state and local governments, realtors and public unions rejected Brady’s statement outright, saying the move would “unfairly penalize taxpayers in states that rely significantly on income taxes.”

House Republicans have also faced opposition from Trump and others after proposing to sharply curtail tax-free contributions to 401(k) programs and move retirement savings to a style of account that allows tax-free withdrawals, rather than the tax-exempt contributions that are popular with 401(k) investors.

House Republicans now say they could permit higher 401(k) contribution limits but continue to talk about tax-free withdrawals. “We will expand the amount that you can invest. But we’ll also give you an option to actually not be taxed later in life,” House Republican leader Kevin McCarthy told Fox News.

The current cap on annual 401(k) tax-free contributions is $18,000.

Corker said congressional tax committees seem to be falling short of their goal to eliminate $4 trillion in tax breaks to prevent the Trump plan from adding to the federal deficit.

“They’re having great difficulty just getting to $3.6 trillion,” said the Tennessee Republican, who has vowed to vote against tax reform if it increases a federal debt load that stands at more than $20 trillion.

Ohio’s Republican governor, John Kasich, told Fox News Sunday that spending on entitlement programs such as Medicare, Medicaid and Social Security should also be reviewed as part of the effort to pay for tax cuts.

“It may be separate from the tax bill, but it needs to happen,” Kasich said.

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Climate Change Affects Coastal Communities and Beyond

At least one in 10 people globally lives near the coast in a low-lying area. As the population increases and sea level rises, their homes are increasingly being threatened. The countries with the most people at risk include the United States, China, India and Bangladesh, and Southeast Asian countries such as Vietnam and Indonesia. Scientists say climate change is to blame for the threat, and it has far reaching implications. VOA’s Elizabeth Lee explains.

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Radio Pollution Creates Space Shield for Satellites

People are big polluters, on the land, in the sea and even in outer space, that can include anything from a hammer that floats away from the space station, to radiation from a nuclear weapons test in the atmosphere.

“This can range from little chips of paint all the way up to spent rocket bodies and things like that,” said Dan Baker, director of the Laboratory of Atmosphere and Space Physics at the University of Colorado, Boulder. “We’ve been trying to figure out how can we most effectively eliminate this debris without causing more of a problem.”

Space debris travels so fast, even an orbiting chip of paint can poke a hole in a satellite. But Baker says something tinier, and natural, is a bigger hazard: It’s the highly charged “killer electrons” of the magnetized zone above the earth called The Van Allen Belts.

“We’ve observed them to cause very significant problems for spacecraft,” Baker said.

Electro-magnetic planetary blanket

The doughnut-shaped Van Allen Belts around our planet protect life on earth from solar winds and cosmic rays. But their highly energetic charged particles can damage the circuitry in space stations, weather satellites and other machines that travel through that region of space.

Baker notes that “killer electrons” can also come from some human activities, like the atmospheric testing of nuclear weapons.

“Back in the 1950s and especially in the 1960s, there were nuclear explosions that put huge amounts of radiation into space that caused many satellites to ‘die’ because of radiation damage,” he said. “And if that were to happen today, we know that there are over 1,400 satellites operating in space around the earth and all of those could be subject to very severe consequences.”

Most nations adhere to treaties that prohibit atmospheric weapon testing. But Baker says that’s no guarantee.

“What is worrisome to us from a political standpoint today is that there are nations, for example, North Korea and others, that may be thinking once again, and who may not be adherent to such treaties, that this might be an interesting way to mess with modern technology,” Baker said.

Mysterious space shield

Radiation particles in the Van Allen Belts already “mess” with modern technology. So when satellites must spend time in that region, they are built with thicker materials. That armor makes them heavier, and more expensive. Fortunately, spacecraft and satellites that orbit just under the Van Allen Belts don’t need this heavy shielding. Baker says that’s because, at the lower edge of the Van Allen Belts, the killer electrons abruptly stop.

He compares it to the shields that protected Captain Kirk’s ship, the Enterprise, from phasers and asteroids on Star Trek.

Scientists have known for years that something here on the earth creates an invisible bubble that clears killer electrons from the lower edge of the Van Allen Belts. Just what makes that shield has been a mystery.

But recently, Baker’s teams figured out its source. The “bubble maker” is very low frequency radio transmissions, also known as VLF. Militaries use VLF to communicate with submarines underwater. It turns out those radio waves also travel up, through the atmosphere, to the Van Allen Belts.

“So the VLF bubble is made up of these intense waves. These waves act to sort of scatter and scrub the inner part of the Van Allen Belts,” Baker said, admitting, “I would prefer that we not be messing with nature. However, in this particular case I would say that there is some evidence that this is beneficial.”

John Bonnell, a researcher at the University of California Berkeley’s Space Sciences Lab, agrees that VLF “pollution” is probably benign, and he points to the high-energy radiation emitted by lightning bolts as evidence.

“We’ve had natural clearing of the radiation Belts with lightning, for as long as we’ve had lightning. So in essence, you’ve had a long-running experiment that you can look at and say, ‘Well, if we’re going to do things on sort of a sporadic basis, whereas lightning’s been doing it daily for hundreds of millions of years, the likelihood of there being a bad side effect is pretty minimal,'” he said.

Bonnell says that discovering a man-made way to clear killer electrons from the Van Allen Belt does not mean we will soon create “shields up” devices that use magnetics or radio transmissions. At least, he says, we’re not making them yet.

“It’s a fascinating possibility and it’s a fascinating technology that could enable us in the future, to explore more of the solar system with people, with robots. And so it’s definitely something that people pick away at slowly over time,” he said.

Bonnell says scientists, engineers and astronomers have teamed up to make amazing discoveries about how to study, and travel through, outer space. And while the future shape of space exploration is a mystery, our new understanding about the man-made “pollution” that shields satellites may be an important part of it.

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For Spanish, Catalan Economies, No Winners in Standoff

Xavier Gabriel can take some credit if the tiny Catalan mountain town of Sort is one of the most famous in Spain.

He runs a lottery shop called La Bruja de Oro, or The Golden Witch, in a town whose name, aptly, means “Luck” in Catalan. Its fortune in having sold many prize-winning tickets has made it a household name and a successful online business.

But the crisis surrounding Catalonia’s push for independence has changed life for 60-year-old Gabriel. He joined more than 1,500 companies in moving their official headquarters out of the wealthy region in recent weeks. Their main fear: that they would no longer be covered by Spanish and European Union laws if Catalonia manages to break away, dragging their businesses into unknown territory.

“The time had come to make a decision,” said Gabriel, who employs 16 people and describes himself as a proud Catalan.

​Hedging their bets

Like Gabriel’s, the vast majority of companies that moved their headquarters didn’t transfer workers or assets, such as bank holdings or production equipment. So far, it’s mainly a form of legal insurance. But as the political crisis escalates, the risk is that companies are deferring investments and hiring. There is evidence that tourists are holding off booking, perhaps frightened by images in the media of police crackdowns, street demonstrations and strikes.

And the situation risks getting worse before it improves: the central government’s decision Friday to take control of the region could spiral out of control if there is popular resistance, whether by citizens or local authorities like the Catalan police force.

“There is absolutely no doubt that the crisis is having a very damaging effect on the economy,” said Javier Diaz Gimenez, an economics professor at Spain’s prestigious IESE Business School.

Financial markets in Spain have so far fallen only modestly, reflecting investors’ apparent belief that the tensions will eventually be resolved. The Spanish government has called a regional election in Catalonia for Dec. 21 and could later consider revisions to the constitution that might placate some of the independence supporters.

But that could take some time, Diaz Gimenez says, given how confrontational both sides have been.

Banks leave

The list of businesses moving headquarters includes Catalonia’s top two banks, Caixabank and Sabadell, which are among Spain’s top five lenders. Then there is the Codorniu cava sparkling wine maker for which Catalonia is famous. Another well-known cava maker, Freixenet, is also planning to follow if the independence drive continues. Publishing giant Planeta, the world’s leading Spanish-language publisher and second biggest publisher in France, has also moved its official address out of Catalonia.

Caixabank says it suffered a moderate but temporary run on deposits because of the crisis, but said it has since recovered and was adamant the move was permanent.

Shares for Caixabank, Sabadell and some other companies have been volatile, falling after the Oct. 1 vote for independence and jumping sharply when they announced their decision to move headquarters.

Tip of the iceberg

Lottery shop owner Gabriel says ticket sales this month are up nearly 300 percent over last year, a rise he attributed to popular support for his decision to move his business.

Diaz Gimenez said the decisions to move headquarters, while not immediately affecting jobs, were “just the tip of the iceberg.”

“Plans to relocate firms or invest elsewhere are going to accelerate and some of it is going to go to, say, Poland, and it’s never going to come back,” he said.

“People that were thinking about investing in Spain and Barcelona are starting to think again,” he said. “It’s not just Catalonia. It’s the mismanagement by Spain, which is proving that it’s not a serious country because it cannot solve this thing.”

Spanish economy humming

The turmoil, ironically, comes just as Spain has been enjoying some of the fastest economic growth in Europe.

Its economy, the fourth-largest in the 19-country eurozone, grew by a hefty quarterly rate of 0.9 percent in the second quarter. The government has maintained its forecast for growth in 2017 at 3.1 percent, but revised its estimate for 2018 from 2.6 percent to 2.3 percent because of the political crisis. Moody’s credit rating agency has warned that a continued political impasse and, ultimately, independence for Catalonia would severely hurt the country’s credit rating.

Billions at stake

Tourism seems to be taking the biggest hit so far.

Experts say spending in the sector in Catalonia in the first two weeks of October — that is, following the independence referendum — was down 15 percent from a year earlier.

Tourism represents about 11 percent of Spain’s 1.1-trillion euro ($1.3 trillion) gross domestic product, with Catalonia and its capital, Barcelona, providing a fifth of that, being the most popular destinations for visitors.

Exceltur, a nonprofit group formed by the 25 leading Spanish tourist groups, expects growth in tourism this year to ease from an estimated 4.1 percent to 3.1 percent.

Reservations in Barcelona alone are down 20 percent compared with last year, it said. If the trend continues in the final three months of the year, it could lead to losses of up to 1.2 billion euros ($1.41 billion) in the sector, which in turn could affect jobs.

Analysts fear that the independence movement’s stated aim of continuing to create as much social and economic chaos for Spain as possible could exacerbate the situation. The Catalan National Assembly group has been openly talking about a boycott against Spain’s top companies and major strike activity.

“Spain, its tourism, everything is very dependent on image,” Diaz Gimenez said. “And this is just killing it.”

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On Climate Change, It’s Trump vs. Markets

At the 2015 Paris summit, world leaders pledged to take steps to avoid catastrophic climate change. This November in Bonn, Germany, U.N. negotiators will be back, working out the details of how to cut emissions of planet-warming gases. It is the first conference since President Donald Trump said the United States would withdraw from the agreement. That leaves questions about the direction of U.S. greenhouse gas emissions. As VOA’s Steve Baragona reports, the answer is not straightforward.

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Ghostly Things Are Happening in Harpers Ferry, West Virginia

Tuesday is Halloween, the spookiest day of the year. Some people like to use the holiday to visit scary attractions like haunted houses. In historic Harpers Ferry, West Virginia, a ghost tour takes visitors to places that are said to be haunted. But that’s no surprise to locals, who say they often see and hear paranormal activity. VOA’s Deborah Block has the spine-chilling story.

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Artisans in Mali Hope to Bring Back an Ancient Fabric Style

Artisans in Mali are hoping that Bogolan, a traditional cotton fabric, will continue to fascinate Western fashion designers and provide jobs at home. VOA’s Teffera Girma Teffera and Bagassi Koura visited a small neighborhood in central Bamako where artisans are hard at work. Salem Solomon narrates.

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Dracula Sings His Way Into Sweden’s Royal Opera House

While American’s prepare for Halloween — a holiday known for ghosts and goblins and costumed children going door-to-door and scaring candy from their neighbors — in the Swedish capital of Stockholm, a thousand people dressed as vampires from around the world descended upon the Royal Opera House for the final dress rehearsal of an opera about history’s best-known vampire. Arash Arabasadi reports.

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Angelina Jolie Supports Film That Speaks to Human Rights in Afghanistan

When Angelina Jolie puts her name on a film, you will likely find an important message in there. “The Breadwinner” is no exception, spinning an inspiring tale of an Afghan girl who won’t be denied her human rights. The film was recently screened in Washington with a special guest who could relate to the story firsthand.

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Retailers Offer New Tools to Help Shoppers Find Clothes That Fit

Stores watching Amazon take a larger share of clothing sales are trying to solve one of the most vexing issues for online shoppers: finding items that fit properly.

The retailers are unleashing tools that use artificial intelligence to replicate the help a salesperson at a store might offer, calculate a shopper’s most likely body shape, or use 3-D models for a virtual fitting room experience. Amazon, which some analysts say will surpass Macy’s this year as the largest U.S. clothing seller, is offering some customers an Alexa-powered device that doubles as a selfie-stick machine and a stylist.

Retailers want to reduce the rate of online returns, which can be up to 40 percent, and thus make customers happier — and more likely to be repeat shoppers. And the more interaction shoppers have with a brand, the more the technology will learn about shoppers’ preferences, said Vicky Zadeh, chief executive of Rakuten Fits Me, a tech company that works with QVC and clothing startup brands.

 

“It’s all about confidence,” she said. “If they have the confidence to buy, they will come back to the retailer time and time again.”

The push is coming from big names like Levi’s and The Gap and startups like Rhone and Taylrd.

Levi’s new Virtual Stylist texts back and forth with online customers to offer recommendations, based on their preferences. Marc Rosen, Levi’s president of global e-commerce, said early tests show the chatbot is driving more browsers to become buyers.

Reliance on body shape

Rakuten Fits Me, which works with QVC and other companies, fine-tuned its fitting technology this summer and said its retail partners now offer garments that should fit shoppers’ body shapes when the customer first does the initial search. Shoppers provide three measurements — height, weight and age — and then it calculates a person’s most likely body shape, not size, to determine the fit for any garment and offer more accurate recommendations.

And Gap Inc. has an augmented reality app in collaboration with Google and startup Avametric that allows shoppers to virtually try on clothes. Shoppers enter information like height and weight and then the app puts a 3-D model in front of them. However, the tool only works on Google Tango smartphones.

Sebastian DiGrande, executive vice president and strategy and chief customer officer at Gap, said the augmented reality app had produced good feedback, but the company is still determining whether shoppers really want a virtual 3-D model.

Clothing brand Tommy Hilfiger similarly has built its mobile app around the camera and image recognition. It has an augmented reality feature enabling shoppers to see what the clothes look like on a virtual runway model — but not their own body type.

And men’s online clothier Bonobos, now owned by Wal-Mart, launched an app that offers customers a virtual closet to see items they bought and saved. The app is converting browsers to buyers at a faster rate, said Andy Dunn, founder of Bonobos.

Companies are smart to offer new tools, but many are too “gimmicky,” said Sapna Shah, principal at Red Giraffe Advisors, which makes early-stage investments in fashion tech.

“If it’s not Amazon, will brand-specific apps be the way for people to shop in the future?” she said. “How many apps are people going to have on their phone?”

And all the companies need to win over customers who prefer to touch and see things in person.

“It’s great that they’re busting their tail with all these apps, but I am skeptical,” said Doug Garnett of Portland, Oregon. Garnett said he buys some clothes online when he knows and understands the brands, but otherwise, “I really need to see them on my body before I act, and really prefer that to be in a store.”

Personalized offers

As Amazon dives further into fashion, it could use its base of data to spur trends and personalize offers for its customers. Its Echo Look features a built-in camera that photographs and records shoppers trying on clothes and offers recommendations on outfits. It works with its Style Check app, using machine learning and advice from experts. The potential: Learn shoppers’ styles and recommend outfits to buy. Amazon reportedly is exploring the idea of quickly fulfilling online orders for custom-fit clothing.

The company also reportedly acquired Body Labs, which creates true-to-life 3-D body models.

“We’re always listening to our customers, learning and innovating on their behalf and bringing them products we think they will love,” said Amazon spokeswoman Molly Wade. She wouldn’t comment on the prospect of custom-fit or the reports about Body Labs.

Steve Barr, the U.S. retail and consumer sector leader at consultants PwC, said that Amazon was trying for a curated experience based on massive data analytics. But he said he thought such an approach had limitations.

“No matter how great Amazon is with artificial intelligence and predictive behaviors,” Barr said, “they can’t put a red tab on a pair of a jeans or a swoosh on a pair of shoes.”

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Facebook Moves to Increase Transparency in Political Ads

Under pressure in advance of hearings on Russian election interference, Facebook is moving to increase transparency for everyone who sees and buys political advertising on its site.

Executives for the social media company said Friday they will verify political ad buyers in federal elections, requiring them to reveal correct names and locations. The site will also create new graphics where users can click on the ads and find out more about who’s behind them.

More broadly, Rob Goldman, Facebook’s vice president in charge of ad products, said the company is building new transparency tools in which all advertisers, even those that aren’t political, are associated with a page, and users can click on a link to see all of the ads any advertiser is running.

Users also will be able to see all of the ads paid for by the advertisers, whether those ads were originally targeted toward them.

3,000 Russia-linked ads

The move comes after the company acknowledged it had found more than 3,000 ads linked to Russia that focused on divisive U.S. social issues and were seen by an estimated 10 million people before and after the 2016 U.S. elections.

Facebook, Twitter and Google will testify in Congress Tuesday and Wednesday on how their platforms were used by Russia or other foreign actors in the election campaign. The Senate and House intelligence committees and the Senate Judiciary Committee are all holding hearings as part of their investigations into Russian election interference.

Facebook’s announcement comes a day after Twitter said it will ban ads from RT and Sputnik, two state-sponsored Russian news outlets. Twitter also has said it will require election-related ads for candidates to disclose who is paying for them and how they are targeted.

Federal election ad archive

Facebook’s Goldman said the company also will build a new archive of federal election ads on Facebook, including the total amount spent and the number of times an ad is displayed, he said. The archive, which will be public for anyone to search, would also have data on the audience that saw the ads, including gender and location information. The archive would eventually hold up to four years of data.

Goldman said the company is still building the new features. They plan to test them in Canada and roll them out in the United States by next summer ahead of the 2018 midterm elections.

“This is a good first step but it’s not at all the last step, there’s a lot to learn once we start testing,” Goldman said in an interview.

Facebook already had announced in September that the platform would require an advertiser to disclose who paid for the ads and what other ads it was running at the same time. But it was unclear exactly how the company would do that.

​Heading off legislation

The moves are meant to bring Facebook more in line with what is now required of print and broadcast advertisers. Federal regulations require television and radio stations to make publicly available the details of political ads they air. That includes who runs the ad, when it runs and how much it costs.

It is also likely meant to head off bipartisan legislation in the Senate that would require social media companies to keep public files of election ads and try to ensure they are not purchased by foreigners. Though Virginia Sen. Mark Warner, a Democratic co-sponsor of the legislation, has said his bill would be “the lightest touch possible,” social media companies would rather set their own guidelines than face new regulation.

Facebook has responded swiftly to the attention it has received in recent months on Capitol Hill, boosting staff and lobbying efforts. The company has spent more than $8.4 million in lobbying Congress and the rest of the government through the third quarter of this year, according to federal records.

Some analysts have warned that policing such online election ads can be difficult. It’s one thing to enforce advertising rules for a print newspaper or a TV station, where real humans can vet each ad before it is printed or aired. But that is much more complicated when automated advertising platforms allow millions of advertisers, basically anyone with a credit card and internet access, to place an ad.

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