The Finance Debate will be livestreamed on Stuff from 7pm tonight.

Tonight, the two men vying to be finance minister after October 17 will face off in the Stuff Finance Debate.

In ordinary times, the debate would be important enough: each side would give their accounts of debt, economic growth and deficits: but there would usually be surpluses either here in the present, or on the not-so-distant horizon. Covid-19 has changes that completely.

Now the real debate will be about which major party – and which potential minister – has the plan to grow New Zealand out of what will be a long coronavirus slump.

The Finance Debate will stream live on Stuff tonight.

Stuff

The Finance Debate will stream live on Stuff tonight.

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Given the lockdown smashed economic growth to the tune of 12.2 per cent in the last quarter – much less than expected – the economy will grow, and we will be officially out of recession next quarter.

But the overall size of the economy will have contracted.

International tourism is clearly the worst-hit sector and won’t be coming back any time soon to what it was before. If a travel bubble with Australia opens in, for example, in the next six months, that will help. But there are big questions about that.

More generally, the debate will likely focus on which plan to rebuild and stimulate the economy Kiwis are more comfortable with.

The original centrepiece of Labour’s plan – which was basically backed by all parties in Parliament – was the wage subsidy. As that runs out,

SPRINGFIELD, Ill. (AP) — Both sides in the debate over a ballot measure to change Illinois’ income tax system from a flat-rate to a graduated structure have straightforward arguments

Democratic Gov. J.B. Pritzker and other proponents call it the “fair tax” because it demands more from those with higher incomes. Those making less than $250,000 a year would pay no more than the current 4.95% flat rate.

Opponents point to the state’s history of political corruption, saying the proposal on the November ballot would loosen constitutional restraints on lawmakers’ spending.


THE PROPOSAL

The ballot question would amend the Illinois Constitution to discard the current income tax system, in which every individual pays the same flat rate, 4.95%, and corporations pay 7%. It would set up brackets, like the federal government and 32 other states. The tax rate would increase with income.

BIG STAKES, BIG MONEY

Campaign group Vote Yes for Fairness has $56.5 million to spend on its campaign, all from billionaire Pritzker. A group backed by labor and other advocacy groups has raised $1.9 million.

The Coalition to Stop the Proposed Tax Hike Amendment is not far behind, with $48.6 million in the bank — 97% of it coming from Chicago hedge fund manager Ken Griffin.

THE GENESIS

The state Supreme Court invalidated a graduated tax approved in the 1930s. A flat tax of 2.5% on individuals and 4% on corporations in 1969 came months before a convention began writing a new state constitution. Delegates considered a graduated tax but ultimately were wary of asking voters to endorse a constitution with a new tax setup. Subsequent plans failed before Pritzker, who campaigned on the issue in 2018, got approval to put the question on the ballot.

THE RATES

Voters don’t get to choose the rates. The General Assembly approved

(Bloomberg) — U.S. stocks retreated from almost five-week highs after House Speaker Nancy Pelosi dampened expectations for more fiscal stimulus. Treasury yields edged lower and the dollar weakened.

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The S&P 500 remained higher for a second day after President Donald Trump touted progress in talks even though there were few signs the two sides are any closer on a deal. Pelosi said there won’t be a standalone bill on airlines without a guarantee the other stimulus items are going to be addressed.

“The market is very dependent on stimulus talks,” said David Wagner, portfolio manager and analyst at Aptus Capital Advisors. “I think there is more dependence on that than the actual outcome and policy changes from a change in the administration.”

Eaton Vance Corp. leaped after the investment firm agreed to be taken over by Morgan Stanley. IBM surged after saying it will spin off its infrastructure unit. Regeneron Pharmaceuticals Inc. rose after Trump said its antibody cocktail was the “key” to his quick recovery. The president said he would authorize its emergency use.



chart: Gauge of semiconductor stocks rises to 20-year relative high versus the S&P 500


© Bloomberg
Gauge of semiconductor stocks rises to 20-year relative high versus the S&P 500

Bulls are now back in control of a market that’s increasingly betting that a Joe Biden presidential victory and gains by Democrats in Congress will be good for equities. The scenario seems to be quelling volatility even as risks from a split in government to a resurgence of coronavirus cases threaten the economic rebound.

“The market is now almost treating Trump’s actions as a sideshow, and is much more firmly pricing Biden in the White House,” Mizuho strategists including Peter Chatwell wrote in a note.

Still, they warned investors against “getting bulled-up on Biden” and the possibility of Democrats winning in the November election, including the Senate. Trump

Democcratic vice presidential candidate Kamala Harris went after President Trump for not paying enough money in taxes, and questioned who he might owe money to.

“We now know because of great investigative journalism that Donald Trump paid $750 in taxes,” Harris said during Wednesday night’s vice presidential debate. “When I first heard about it, I literally said, ‘You mean $750,000?’ Nope $750.”

Harris was referring to a recent report by The New York Times, who obtained information on the president’s 2016 and 2017 taxes, both of which show he paid a total of $750 in federal taxes each year.

The Times also reported that he paid no federal income taxes for ten of the 15 years prior to winning the presidency in 2016, largely due to the fact that he reported financial loses greater than his income.

KAMALA HARRIS VOWS BIDEN WILL REPEAL TRUMP TAX CUTS ‘ON DAY ONE’

“We now know Donald Trump owes, and is in debt for $400 million, and just so that everyone is clear, when we say in debt – it means you owe money to somebody,” Harris said Wednesday in answer to a question about presidential transparency.

Harris added: “And it’d be really good to know who the president of the United States, the commander-in-chief owes money to, because the American people have a right to know what is influencing the president’s decisions and is he making those decisions on the best interests of the American people….or self-interest?”

Trump has disregarded the report as “fake news” and claimed that his tax returns would be available as soon as the IRS had completed their audit.

Pence, however, highlighted the president’s dismissal of the report and said, “the American people have a president who’s a businessman, a job creator, he’s paid tens of millions of dollars

The event offered far more substance than the shout-fest between the candidates at the top of the ticket last week. The debate also featured a number of claims about the two sides’ respective economic records that stretched the truth or outright snapped it. Here’s a look at where Pence and Harris collided on taxes, the economic recovery and manufacturing jobs.

Harris pledged Joe Biden would repeal Trump’s tax cuts immediately; Pence said all Americans would see a tax hike.

Harris was repeating a claim the Democratic nominee himself has made to explain how he would pay, in part, for some $7.3 trillion in proposed spending on new stimulus, infrastructure projects and social safety net programs.

“On Day One, Joe Biden will repeal that tax bill,” Harris said of Trump’s signature tax cut that heavily benefitted corporations and the wealthy. “He’ll get rid of it, and what he’ll do with the money is invest it in the American people.”

Biden can’t unilaterally cancel a law. He will need to earn congressional approval for that. 

But the candidates didn’t focus on procedure. Instead, Pence countered Harris by arguing such a proposal would increase taxes on middle-income earners

“Mr. Pence is correct that many middle-income families received significant tax cuts from the 2017 tax law, which lowered rates, nearly doubled the standard deduction and increased the child tax credit,” the Wall Street Journal’s Richard Rubin notes. He points to an analysis by the Tax Policy Center that found the middle quintile of households “received a tax cut worth 1.6% of after-tax income, less than the average for all income groups. Higher-income households did fare better.”

Yet Pence’s jab forced a clarification from Harris, backed up by the campaign’s stated plans: A President Biden would preserve benefits from the 2017 tax