Could Nikki Haley Win New Hampshire? Tax Bill Moving
Author: Greg Valliere
January 10, 2024
EXCUSE US FOR BEING CYNICAL — the media is breathlessly hyping allegedly close races in Iowa and New Hampshire. One poll showed Donald Trump ahead of Nikki Haley by only 7 points in New Hampshire, and the spin intensified yesterday — could Trump be in trouble?
THIS IS STILL A RACE FOR SECOND PLACE, with two candidates on very thin ice: Florida Gov. Ron DeSantis, in single digits in some polls, and former New Jersey Gov. Chris Christie, who is likely to drop out before the end of the winter.
THAT LEAVES THE RISING STAR, former South Carolina Gov. Haley, who is playing the oldest game in primary politics: the expectations game. If she finishes a strong second in New Hampshire on Jan. 23, Haley will portray that as a victory (she has no chance in Iowa next Monday night).
SO — IS TRUMP LOSING MOMENTUM? Maybe a little. He continues to defy his advisers, showing up in court proceedings he doesn’t have to attend, and making reckless comments like his wish that the economy crashes this year, which he thinks would help his presidency in 2025.
A CHILLY WILD CARD: The high temperature on Monday in Iowa will be well below zero, so turnout will be crucial. Trump has a loyal base in Iowa and will win easily there. But quirky and chilly New Hampshire could drag his vote total below 50%, which might get the media excited about a real horse race.
BOTTOM LINE: We still think the primaries will effectively end on Super Tuesday, March 5. It’s all about amassing delegates, and Trump will pull into a huge lead by mid-March and will be the presumptive nominee as spring begins.
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TAX BILL COULD MOVE IN CONGRESS: It’s unlikely that Congress will get a budget deal by Jan. 19 — so a continuing resolution will probably be needed. But that won’t stop the lawmakers from moving on a separate track to pass tax reform legislation, perhaps within weeks.
A GROWING NUMBER OF LAWMAKERS want to curb abuses in the employee retention tax credit, which was passed during the pandemic and has far exceeded a $100 billion cost estimate, amid charges of fraud in the program. These lawmakers would take the savings and apply them to businesses and a partial restoration of the popular child tax credit.
THERE’S GROWING SUPPORT for this bill, which would change limitations on businesses’ deductions for interest and for capital expenses. Companies now must spread deductions for research costs over at least five years instead of writing them off immediately, as they did before 2022.
REPUBLICANS CREATED THE CURRENT RULE as part of a 2017 tax law as a way to pay for lower tax rates, but research-intensive businesses have been hit hard and have been lobbying Congress to restore the old system, retroactively and going forward.
A SUMMARY OF THIS INTRIGUING BIPARTISAN BILL is in today’s Wall Street Journal, which has been calling for reforms to the employee retention tax credit.
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