Posts tagged with "Secretary of the Treasury Steven Mnuchin"

Cash on delivery: The selling of our mailboxes

December 13, 2018

The government is looking to “sell” Americans’ last bastion of privacy—our mailboxes—posthaste.

Specifically, in seeking ways to boost revenue for the U.S. Postal Service‘s money-losing operations–the Trump Administration is suggesting selling access to mailboxes, according to a December 11 report by CBS News.

“The legal mailbox monopoly remains highly valuable,” said a government report issued last week. “As a means of generating more income, the mailbox monopoly could be monetized.

While the report didn’t detail how much the USPS could earn from franchising mailboxes, it suggests that the USPS could charge third-party delivery services such as UPS or FedEx to gain access to consumer mailboxes, the network news outlet said. It’s currently illegal for other delivery services to drop packages or letters in a mailbox–a restriction that even applies to neighbors stuffing flyers for a local event.

The recommendation—a product of a task force created by President Donald Trump and chaired by Secretary of the Treasury Steven Mnuchin—is just one of the ideas that the group made to tweak the USPS business model. According to the report, as of the end of FY 2018, the USPS balance sheet “reflects $89 billion in liabilities against $27 billion in assets—a net deficiency of $69 billion between FY 2007 and FY 2018.”

Other proposals from the group included cutting costs and boosting prices for “nonessential services,” including delivery of commercial mail, such as advertising flyers, CBS News reported.

“As [mail service providers] and package delivery companies continue to expand offerings to multiple parts of the value chain, it is reasonable to expect a willingness to pay for access to USPS mailboxes,” the report noted. “By franchising the mailbox, the USPS could expand its revenue and income opportunities without necessitating any change to its current mail products.”

But the economics might not be as rosy as the Trump administration report suggests, Robert Atkinson, president of the Information Technology and Innovation Foundation, a think tank that focuses on productivity and innovation issues, told CBS News.

“Nobody knows what the economics of that are,” Atkinson said in an interview with the network news operation. “Right now, say what you want about the Postal Service, but the part that is perhaps the most efficient is the last-mile delivery,” or the delivery from postal offices to consumers’ homes.

Instead, it could actually backfire and end up costing the USPS more money, Atkinson warned: “One of the reasons the USPS is not even more financially troubled is because they have this monopoly for delivery” to your mailbox, he explained.

If the USPS sells access to consumers’ mailboxes, even more businesses may opt for rival services such as FedEx or UPS. It’s not clear whether the franchise fees would offset the loss of that mail revenue, he added.

“I’m dubious that they could charge a price that could be any better than they already make, because then they’d be delivering fewer of those letters or packages,” Atkinson said.

While the report didn’t single out Amazon, the online retailer , President Trump repeatedly has blamed the company for some of the USPS’ financial woes. The president has claimed the USPS loses $1.50 on average for each package it delivers for Amazon.

There’s little evidence to back up his claims, however, as the package delivery remains one of the few lines of business that’s growing for the USPS, CBS reports.

Research contact: @aimeepicchi

Administration aims $100 billion tax cut at the rich

August 2, 2018

As if the Tax Cuts and Jobs Act did not provide enough payback to President Donald Trump and his elite donors in 2018; the POTUS now is contemplating a unilateral move that would cut taxes, mainly for rich people, by $100 billion.

Specifically, the administration is considering bypassing Congress in an effort to cut capital gains taxes—a gambit that many say would not be lawful; but, like the earlier act, would overwhelmingly benefit the wealthy.

Indeed, The New York Times reported on July 30, that Treasury Secretary Steven Mnuchin had said last week at the Group of 20 (G20) summit in Argentina that his department was “studying whether it could use its regulatory powers to allow Americans to account for inflation in determining capital gains tax liabilities.”

Mnuchin noted that the Treasury Department could change the definition of “cost” for calculating capital gains, the Times said—thereby, enabling taxpayers to adjust the initial value of an asset, such as a home or a share of stock, for inflation when it sells.

As an example, the Times said, if a high earner spent $100,000 on stock in 1980 , and sold it for $1 million today, he or she would owe taxes on $900,000. But if the original purchase price was adjusted for inflation—as Mnuchin and Trump are considering— it would be about $300,000, reducing  his or her taxable “gain” to $700,000. That would save the investor $40,000.

If it can’t get done through a legislation process, we will look at what tools at Treasury we have to do it on our own and we’ll consider that,” Mnuchin told the Times, emphasizing that he had not concluded whether the Treasury Department had the authority to act alone.”

As the news hit the streets, Democrats pushed back. Senator Elizabeth Warren (D-Massachusetts) took to Twitter to voice her disgust, saying “@realDonaldTrump wants to go around Congress & hand $100 billion to his rich buddies on top of $1.5 trillion he gave away to billionaires & big corporations last year. DC works great if you’re rich & powerful. How about a gov’t that works for everyone?

An NBC News/Wall Street Journal poll fielded in April found that the Tax Cuts and Jobs Act already had lost its luster among American voters. Just 27% of the electorate called it a good idea, down from 30% in January. A 36% plurality called it a bad idea, while the rest had no opinion.

Research contact: @mmurrarypolitics