Real estate, alternative real assets and other diversions

Letter from Washington The daily scoop from Washington

Political Insider

“U.S.-China Talks Near Close With Positive Signs From Both Sides.”  This morning’s Bloomberg article led with:

Chinese authorities planned to give a statement following the latest round of U.S. trade talks on Tuesday in Beijing, after both sides signaled progress toward resolving a conflict that has roiled markets.

“The talks are still underway and I believe we will release a detailed readout after they are concluded,” Chinese foreign ministry spokesman Lu Kang told reporters at a regular briefing Tuesday in Beijing. No timing was given and it wasn’t immediately clear if the U.S. would release a statement.

U.S. Commerce Secretary Wilbur Ross expressed optimism on Monday, telling CNBC that “there’s a very good chance that we’ll get a reasonable settlement.” Vice Premier Liu He made an appearance at the talks on Monday in a sign the Chinese were also pushing for a positive outcome.

President Trump will address the nation on The Wall and the Shutdown at 9 PM EST tonight.  This in advance of his visit Thursday to the U.S.-Mexico border.  Last night, House Speaker Pelosi (D-CA) and Senate Minority Leader Schumer (D-NY) demanded equal air time in this statement.  More in last night’s New York Times article.

“White House rules IRS can issue tax refunds during shutdown…”  Last night’s Washington Post article led with:

The White House on Monday directed the Internal Revenue Service to pay tax refunds to millions of Americans during the federal shutdown, marking its most dramatic reversal yet of past legal precedent as officials scramble to contain public backlash from the funding lapse.

Last year, and during previous administrations, the IRS said it would not pay tax refunds during a government shutdown. But Trump administration lawyers ruled Monday that the refunds could be processed after all, a move that some Democrats called legally dubious.

The decision could prove extremely consequential for U.S. households and the U.S. economy. Last year, between Jan. 29 and March 2, the IRS paid more than $147 billion in tax refunds to 48.5 million households.

But it is also the latest in a string of sudden shifts and legal reversals that have seen the White House reverse precedent in the face of public pressure. Senior administration officials changed rules to pay Coast Guard salaries in December, restart an IRS program to clear mortgage applications and reopen some national parks. They are now searching for ways to prevent the nation’s food assistance program from running out of money. Unless the shutdown ends, the program lacks funds to cover expected demand in February. By March, it would be out of money entirely. A new legal ruling on the issue could come this week.

“We have tried to make this as painless as possible consistent with the law,” White House Office of Management and Budget acting director Russell Vought said at a White House briefing, describing the White House’s approach to managing the shutdown.

President Trump has threatened to continue the partial federal shutdown for months, much longer than past lapses have endured.

I’ve estimated that we’ll see approximately $74.5 more individual income tax refunds than last year’s $284.9 b. (through mid-May) because about 60% of taxpayers have yet to adjust their withholding and estimated tax payments for the Tax Cuts and Jobs Act.

IRS Tax Filing Season To Start January 28th per yesterday’s press release.  Last year the tax filing season opened on January 29, 2018 as the IRS struggled to implement the Tax Cuts and Jobs Act, enacted on December 22, 2017.  This year, despite the optimistic tone of this press release, the IRS will struggle to process over 140 m. individual returns because of the shutdown and thousands of pages of last-minute regulations detailing the Tax Cuts and Jobs Act.

Legislation To Lower Rx Prices May Be Enacted This Year.  Yesterday’s Washington Post article stated:

Political Insider

About Pete Davis

Pete Davis

Pete Davis advises Wall Street money managers on Washington, DC policy developments that affect the financial markets. Visit his website here daviscapitalinvestmentideas.yolasite.com.

Articles by Pete Davis

Our Partners