Categories
Politics

Biden indicators order to crack down on Huge Tech, enhance competitors ‘throughout the board’

President Joe Biden signed a new executive order on Friday aimed at tackling anti-competitive practices in big tech, labor and numerous other sectors.

“Capitalism without competition is not capitalism. It’s exploitation, “Biden said in a speech ahead of the signing of the directive in the White House.

The comprehensive arrangement, which includes 72 measures and recommendations involving more than a dozen federal agencies, is intended to reshape thinking around corporate consolidation and antitrust laws, according to a White House leaflet.

These broad goals and initiatives include:

  • Call on the Federal Trade Commission to “question previous bad mergers” that previous governments let slip
  • Urging the FTC to ban restrictions on professional admission on the grounds that they “impede economic mobility”
  • Encourage the FTC to prohibit or restrict non-compete agreements
  • Encouraging the Federal Communications Commission to restore “net neutrality” rules that were reversed during the Trump administration
  • Request to the FCC to block exclusive contracts between landlords and broadband providers
  • Lowering prescription drug prices by helping government and indigenous efforts to import cheaper drugs from Canada
  • Allow hearing aids to be sold over-the-counter
  • Establishment of a “White House Competition Council” to guide the federal response to the growing economic power of large corporations

“The impetus for this executive order is really where we can encourage more competition across the board,” said White House chief economic adviser Brian Deese, Ylan Mui of CNBC in an exclusive interview aired early Friday morning.

Through its technology-related measures, the Biden order aims to ensure that the largest companies in the industry wield their power to crowd out smaller competitors and exploit consumers’ personal information.

The regulation calls on regulators to undertake a number of reforms, including increased scrutiny over technology mergers and a greater focus on maneuvers like “killer acquisitions” where companies buy smaller brands to take them off the market.

The tightened grip of the technology giants has led to a decline in innovation, Deese told Mui.

These platforms have “caused significant problems,” Deese said. These include “privacy and security issues for users” and “small business entry issues,” he said.

The executive order “is not just about monopolies,” said Deese, “but about consolidation in general and the lack of competition when you have a limited number of market participants.”

He noted that some research suggests that wages are lower in more concentrated markets dominated by only a handful of companies. A White House factsheet cites a May 2020 Journal of Human Resources paper that based on data from CareerBuilder.com, it found that market consolidation points to a double-digit percentage decline in wages.

The order was announced just weeks after the House Judiciary Committee voted for six antitrust laws to reinvigorate competition in the technology sector.

The draft laws that would make it more difficult for dominant companies to complete mergers and forbid certain common business models for such companies have been significantly pushed back by those concerned that they will not go far enough or have unintended side effects.

In late June, a judge dismissed complaints from the Federal Trade Commission and a group of attorneys-general alleging that Facebook illegally maintained monopoly power.

Biden’s executive order also calls on the FTC to enact new rules for Big Tech’s data collection and user monitoring practices, and calls on the agency to ban certain unfair competition practices in internet marketplaces.

The arrangement could provide some relief to small and medium-sized businesses that have complained about the alleged crippling grip of tech companies like Amazon, Apple, Facebook and Google on the digital markets.

Biden’s executive ordinance does not unilaterally impose its will on big tech companies, but instead often calls on independent agencies to take action.

But the new FTC chairman, Lina Khan, a Biden-appointed person who, at 32, was the youngest person to ever hold that role when she was sworn in last month, already has a reputation for being a vocal advocate of reform and empowerment Developed regulations for technology giants.

Amazon is demanding that Khan be excluded from ongoing investigations into his business, arguing that it lacks impartiality and that it has repeatedly said the company is “guilty of antitrust violations and should be liquidated.”

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WATCH: How US Antitrust Law Works and What It Means for Big Tech

Categories
World News

UNESCO Mosul Competitors Design Prompts Outcry

MOSUL, Iraq – The palm trees were the last straw. In a UNESCO competition for the restoration of Mosul’s most famous landmarks, they were part of the winning design. Iraqi architects complained that neither the palm trees nor the golf-style design are at home in the historic city.

Not only was the $ 50,000 price tag at stake and the contract for a final design – which was funded by the United Arab Emirates and went to an Egyptian architectural team – but apparently also the pride of Iraq’s second largest city being made the rubble of the struggle against the Islamic State four years ago.

“It’s a fiasco, to be honest,” said Ihsan Fethi, one of Iraq’s most famous architects, of the competition for the Nouri mosque project. “The whole thing was a terrible tragedy for us.”

Mr Fethi and the Iraqi Architects’ Union had more substantial complaints about the winning entry for a new mosque complex than about transplanted trees, including items they considered anti-Islamic and a lack of parking. They say it betrays the architectural legacy of the historic city.

In a country with a proud architectural history, produced by Rifat Chadirji, the father of modern Iraqi architecture, and the design icon Zaha Hadid, this resentment is all the more palpable. In the past few decades, architecture was so important to Iraq that he commissioned buildings from Le Corbusier and plans from Frank Lloyd Wright.

The Iraqi engineering company that oversees the architects’ union issued a statement against the project. The Iraqi Architectural Heritage Preservation Society rejected the winning design of the 123-entry competition as seriously flawed. The design was said to introduce numerous “alien” concepts that would change the place beyond recognition and called on the Iraqi Prime Minister to intervene.

It is not the location of any mosque. Formally known as the Great Mosque of Al-Nouri, Abu Bakr al-Baghdadi, the then leader of ISIS, proclaimed the caliphate in 2014 after the fighters of the Mosul group joined almost a third of Iraq and parts of Syria. Three years later, when the US-backed Iraqi forces were fighting to defeat the terrorist group, ISIS fighters blew up the mosque and an even more iconic minaret as they retreated.

Air strikes and explosives flattened large parts of the old city of Mosul, killing thousands of civilians and hundreds of Iraqi security forces. The rebuilding of the mosque complex is seen as essential to the idea that the destroyed city has gone beyond ISIS despite its losses.

The Al-Nouri Mosque, named after Nur al-Din Mahmoud Zangi, the ruler of Mosul and Aleppo, dates from the 12th century but was completely rebuilt in the 1940s.

The $ 50 million project will also restore two badly damaged churches nearby and a 12th century brick minaret.

When the architecture competition was announced, the UN cultural authority said the new design should promote reconciliation and cohesion in the city.

But in many circles it has fared from doing, causing an uproar among architects, city planners and some Mosul residents who say it ignores Iraqi heritage. Perhaps nodding to the United Arab Emirates taking that into account, the award-winning design features cream-colored bricks and straight angles found in the Gulf – a contrast to the arches, blue-veined local alabaster, and limestone of traditional Mosul buildings .

“The local architectural language is not there,” said Ahmed Tohala, lecturer in architecture at the University of Mosul, especially given the city’s history. “The materials, colors, elements, proportions, rhythm, relationship between the elements – it’s another strange language.”

“It looks a lot like the Emirates,” said Mr. Fathi.

To be fair, some of the requirements have been mandated by the Iraqi Sunni Foundation Office that oversees Sunni mosques in Iraq. On a recent day at the construction site, over the roar of a generator, Maher Ismail, the project leader of the Sunni foundation, declared it “a beautiful design”.

The expanded mosque complex will include a public park, religious high school and cultural center, while the mosque and minaret will be restored and architecturally unchanged.

Mr Ismail said criticism of the complex design came from jealous architectural firms.

“Some of the people who wanted to work on the mosque and didn’t get a chance to do so caused a lot of problems in stopping the work,” he said.

After the outcry, UNESCO held a meeting with the Iraqi architects’ union, which claimed it should have been consulted from the start. Among the main complaints, besides aesthetics, were competitive demands calling for an open courtyard next to the mosque for the public and a separate area for dignitaries on a balcony of the prayer room.

“A VIP area is anathema to Islam,” said Mr. Fathi. He said the jurors, including the chairman of the jury, his former student, lacked the necessary background in Islamic architecture to properly select a winning design.

There were also practical concerns – in a city without public transport, only 20 parking spaces were planned for use by the complex’s staff.

Mr. Ismail said that instead of installing a VIP area in the prayer hall itself, they were planning a VIP hall next to the mosque for the visiting officials.

UNESCO also notes that the competition rules were developed in coordination with the Iraqi Ministry of Culture. Winners are expected to provide a more detailed final design, with construction scheduled to begin this fall.

Paolo Fontani, UNESCO’s Iraq director, said changes could be made to the final plans, as is customary in a first draft competition. He said UNESCO would consult with local experts and architects.

The main partner of the victorious Egyptian company, Salah El Din Samir Hareedy, died shortly after the results of the competition were announced. Mr Hareedy died of complications from Covid-19, but common Iraqis joked on social media that it was the curse of Mosul residents who were upset about his draft that killed him.

At the construction site in the heart of the historical part of Mosul on the west side of the Tigris, the crews removed nearly 6,000 tons of rubble from the bombed site and recovered and cleaned 45,000 bricks that will be used to rebuild the minaret. Pieces of marble and stone from the severely damaged mosque were cataloged and sorted for restoration.

Local carpenters, working under the supervision of an Italian expert, restore damaged woodwork in the mosque.

Across the street from the proposed complex, a new coffee house, founded by local activists, flanks a series of brightly colored shops designed to help bring the devastated area back to life.

“It’s too modern,” says Mobashar Mohammad Wajid of the complex design. But Mr Wajid, who was standing in his tiny art studio across from the coffee house with his calligraphy designs, said that once the complex was completed, Mosul residents would likely be satisfied.

“When you see buildings being rebuilt,” he said, “you will be so happy.”

Categories
Health

Knowledgeable on U.S.-China competitors in vaccine diplomacy

Workers unload boxes of the Sinopharm Covid-19 vaccine donated by China at Damascus International Airport in the Syrian capital on April 24, 2021.

Loua Beshara | AFP | Getty Images

The competition between the US and China could heat up on another front: Covid-19 vaccine diplomacy.

China has been a major supplier of Covid vaccines to much of the developing world, an effort some experts said could strengthen Beijing’s global influence and deepen its ties with other nations.

But a health policy and policy expert told CNBC on Thursday that the US is now catching up as the White House lays out plans to donate millions of doses of Covid vaccine overseas and President Joe Biden appears to want to do more.

“We will see China face a more formidable competitor,” Yanzhong Huang, Senior Fellow on Global Health at the Council on Foreign Relations, told CNBC’s Squawk Box Asia.

In recent months, China has been “almost the only major player” sending Covid vaccines to other countries, said Huang, who is also a professor at Seton Hall University’s School of Diplomacy and International Relations.

This is especially true if India has stopped exporting vaccines to prioritize its domestic needs and Russia’s supply abroad remains very limited, he said.

Several reports have indicated that the US is stepping up its efforts to exchange Covid vaccines around the world.

Biden will reportedly announce in a speech at the G-7 summit on Thursday that the US will buy 500 million more doses of the Pfizer BioNTech vaccine to share with COVAX, a global vaccine exchange initiative .

CNBC also reported Wednesday that the government is negotiating with Moderna to secure additional doses of vaccine to supply the world.

Origins of Covid-19

Relations between the US and China got off to a bumpy start under the Biden administration. The two sides have clashed on several issues, including the origins of the coronavirus, which was first discovered in the Chinese city of Wuhan.

Biden said last month he ordered a closer look at the origins of the pandemic, including whether the virus escaped from a Chinese laboratory. In response, China accused the US of a political “guilt game”.

Huang said the issue of the origins of Covid-19 is so politicized that it is likely to fuel further tension between the US and China if additional evidence emerges to the possibility that Covid-19 stems from a laboratory incident.

Without China’s cooperation, such evidence of “smoking weapons” may not be found, Huang said. In the West, however, the theory that the virus came from a laboratory has become an increasingly “credible, if not mainstream,” explanation for the origin of the pandemic, he said.

Categories
Business

Tesla faces strain as EV competitors heats up, ex-Ford CEO says

Elon Musk brought electric vehicles into the mainstream with Tesla. Now the EV company is grappling with the consequences of its own innovation, former Ford Motor CEO Mark Fields told CNBC on Wednesday.

“One of the many things he did is he pushed the industry toward taking EV seriously,” Fields said of Musk, the chief executive of Tesla. “He has real competition now, and that’s why you’re seeing some of their share in some of the major markets under a lot of pressure.”

Tesla shares fell for the third-straight session against the backdrop of multiple challenging headlines for the car manufacturer. One, in particular, is that the San Carlos, California-based company lost some of its grip on the electric vehicle market in April.

Fields was critical of Tesla’s reliance on selling carbon credits to supplement its profits, suggesting it’s a harbinger of more challenges.

“When you look at their year-to-date earnings and their earnings last year, they made a heck of a lot more in selling CO2 credits than they did their total company profit and net profit,” Fields said. “As those credits dry up, there’s going to be a lot of pressure to make money and better margins on their vehicles.”

According to Credit Suisse analyst Dan Levy, Tesla’s global market share was 11% in April, down from 29% in March. He noted share losses in the China, Europe and U.S. markets.

Fields attributed the shift in EV market share to traditional auto giants, such as General Motors and Ford, making headway in the space as new products are announced and come online.

He highlighted that Volkswagen is now leading in EVs in Europe and the Ford Mach E is taking share in the U.S. Ford, which Fields led between 2014 and 2017, in May revealed its electric F-150 to much fanfare.

After soaring in 2020, Tesla shares have dropped more than 14% so far in 2021. The stock, which trades more like a tech stock, closed 3% lower Wednesday at $605.12 a share.

Shares of traditional car companies, taking the form of cyclical stocks, are up double digits this year and have outgained the market through Wednesday.

Ford shares have put up some of the biggest gains, rallying almost 69% this year to $14.91 at the close Wednesday.

Categories
Business

Coinbase CFO on crypto buyers, dogecoin and rising competitors

Coinbase Global released its first quarterly report as a public company on Thursday, showing a surge in business with growing public interest in investing in digital coins.

Despite fierce speculation about cryptocurrency and a multitude of offers, the asset class is volatile. After going public more than a month ago, Coinbase crypto exchange stocks are down 38% from Bitcoin’s high from Bitcoin’s high.

In an in-depth post-graduation interview with Jim Cramer on Mad Money, Alesia Haas, Coinbase’s Chief Financial Officer, spoke about a number of important topics related to digital currency.

Below is information from the questions and answers:

What do cryptocurrency investors buy?

“Usually bitcoin is the first coin people are interested in,” she said. “The other crypto assets on the platform are seeing an increasing volume of trading assets on our platform, so we think that as time goes on, more and more users are engaging with more and more crypto assets, and that’s what we’re looking at looking forward.”

Is Cryptocurrency Regulation Necessary?

“We have relied on regulation since our inception,” said Haas, emphasizing that the company believes regulation will bring confidence to the market. “We love working with regulators. We want to level the playing field and we welcome regulation. We believe it is a benefit to our business, not a burden.”

What does Elon Musk’s reversal in Bitcoin and the volatility in crypto say about the assets?

“I think crypto is here to stay. I think crypto is volatile, however, and you can see that we respond to a tweet, that we respond to one-off headlines,” Haas said. “This is a long-term investment. We believe we are just beginning to see the potential of crypto, but it could be a bumpy journey and we could see days going up and down like we have seen in the past. “

Investors should take Dogecoin Seriously?

“We leave that up to our users to decide. We are a platform. We want to offer all assets that meet our listing standards and we hope to be the place where you can trade anything you want to trade,” said Haas. “That’s not the case today. We’re slow. We need to add more assets. We’re making big investments to improve the speed of our asset additions, but the market is clearly speaking.”

Mastercard, Visa, PayPal, and other financial firms have taken crypto moves. Concerns about competition?

We welcome them. Three years ago when we were the only crypto company we were a little lonely out there, and now that we see most fintechs embracing crypto and big financial services companies, it just really means that Crypto has arrived. This is going mainstream. This is here to stay, but it’s evolving, “Haas said.

Categories
World News

Chinese language electrical automotive makers goal Europe as competitors heats up

Nio plans to begin delivering its ET7 electric sedan from 2022.

Evelyn Cheng | CNBC

SHANGHAI – After the final year of growth in the world’s largest auto market, China’s electric car startups are ramping up their plans to take over Europe.

The Chinese authorities have only begun lifting restrictions on full foreign ownership of local automobile production in the last few years. More than a decade ago, Beijing spent billions of dollars developing its own electric vehicles.

This has helped local players get a head start in making battery powered cars that they are now looking to sell overseas. Goldman Sachs analysts predict that in four years’ time, due to new government guidelines, electric cars will have a larger share of auto sales in Europe and the US than in China, despite the fact that this is the largest market.

The US-listed company Nio has announced that it will enter Europe in the second half of the year. And on Monday, co-founder and president Lihong Qin said the company expected to make an official announcement of such an expansion within a month.

He did not name a specific country and stated that after Europe, Nio still intended to enter the US market.

Amid tensions with the US and attempts to secure an investment deal with Europe, China exported 63,500 all-battery electric vehicles in the first eleven months of last year. This comes from a January report by the China Chamber of Commerce for the Import and Export of Machinery and Electronic Products. While Saudi Arabia and Egypt were the top travel destinations for Chinese cars overall last year, the report saw significant growth in vehicle exports to the UK, Belgium and Germany.

The US-listed company Xpeng is already testing the waters in Norway, where the start-up delivered 100 units of its G3 electric SUV in December.

Later this year, Xpeng hopes to see how customers in Northern Europe react to its P7 electric sedan, said He Xiaopeng, chairman and CEO. He is recruiting new employees and planning to start a business in the region before venturing into Western and Eastern Europe.

Another Chinese electric car startup, Aiways, said it exported more than 1,000 vehicles to Israel and Europe in the first three months of this year.

“It’s no secret that most Chinese EV startups have global ambitions,” said Tu Le, founder of Beijing-based consulting firm Sino Auto Insights. “This will continue as these companies pursue growth and value and see opportunities because there are no viable electric vehicle products in the region.”

He said that with enough local research, some of the Chinese companies in Europe could thrive.

However, the growth in Chinese electric car sales to Europe remains a tiny part of the market.

China accounted for less than 2% of the EU’s car imports in 2019, and the value of 865 million euros means a year-on-year growth of 79%, according to the Association of European Automobile Manufacturers.

In contrast, EU-owned automakers produced nearly 6 million passenger cars in China in 2018, accounting for nearly a quarter of total Chinese automobile production, the association said.

Increasing competition in China

The overseas Chinese startup company comes in when the home market warms up. Nios Qin said the entry of tech companies like Apple and Huawei into the industry creates fierce competition for the automaker.

Tesla is the market leader in the automotive sector and is expanding local production. According to the China Passenger Car Association, the Model 3 was the top-selling electric car in China last year.

With the exception of two mini-electric cars, the association said the next best vehicle in this category would be Aion’s S model, a new energy brand that was spun off from Chinese state-owned automaker GAC. A more expensive model from Nio took ninth place, while Xpeng did not make the top ten list.

“Chinese consumers are increasingly understanding new energy vehicles,” said Qiu Liangping, Aion’s planning director, according to a CNBC translation of his Mandarin-language remarks. In addition to making battery charging easier, Chinese buyers are looking for a better driving experience than fossil-fuel cars with internet-enabled features.

The brand also has its eye on the international market, said Qiu. Prior to the spin-off, Aion and GAC’s Trumpchi brand were already selling cars in Israel, the Middle East and South America.

As the automotive industry continues to move into the electrical space, traditional US and German auto companies are launching their own electric vehicles – many in the Chinese market first.

For example, General Motors’ Cadillac brand presented its Lyriq electric car at the Shanghai Auto Show. According to the company, pre-orders in China will start later this year.

Ford also used the show to unveil its locally made version of the Mustang Mach-e electric car, as well as an Evos SUV developed largely in China that will only be available in the country.

Volkswagen unveiled a third electric car for China, the ID.6, in Shanghai. The German automaker aims to have at least 70% of its cars sold in Europe and at least 50% in North America and China by 2030.

Categories
Business

Daimler expects intense competitors if Apple, Alibaba enter automobile market

LONDON – The CEO of Daimler in Germany believes the automaker will face stiff resistance from tech giants like Google, Apple and Alibaba if it decides to launch its own electric vehicles.

While the tech giants haven’t started selling their own cars just yet, reports suggest they could soon launch products that combine hardware and software if the electric vehicle race gets hot.

“There will be intense competition,” Daimler boss Ola Kallenius told CNBC’s Annette Weisbach on Thursday when he was asked if he was concerned about the entry of digital companies into the electric vehicle market.

“When an industry changes, I think it is natural for new players to look at the industry,” he said.

Kallenius said Daimler will “look at what the brand stands for and carry that into the next technological age,” adding that the company will be able to build on its position if it does well.

His comments come when Mercedes Benz, owned by Daimler, launches an electric version of its flagship S-class luxury sedan.

“It’s kind of the beginning of a new era,” said Kallenius, before adding that the new vehicle was very “curious”.

Prices for the luxury sedan will be announced this summer, but Kallenius said Daimler expects to make money on the vehicle from the time it is sold.

He added that the variable cost of vehicles with a large electric battery is higher than that of vehicles with a traditional internal combustion engine.

“Our task in this decade of transformation is on the one hand to reduce variable costs and restore margin parity in all of our segments,” said Kallenius.

Electric vehicle technology is “still in its infancy” and there is “a lot to be done,” he continued. “It will be scaled and we will have technological developments. I am optimistic that we can restore the margins to which we are accustomed.”

Daimler versus Tesla

Daimler’s shares have risen by more than 173% year-on-year in the past 12 months and were quoted on Thursday at 75 euros per share.

“We have positive momentum in our stock,” said Kallenius, adding that this was due to improved financial performance and the company’s “technology strategy for the future.”

However, Daimler’s market capitalization has fallen from around 185 billion euros today in 1998 to just 80 billion euros. Meanwhile, Tesla’s market capitalization has risen to $ 694 billion.

“Now if we look at the total market capitalization of every single auto player in the world, you get an impressive number,” said Kallenius.

He added, “We need to make sure that the distribution of that total market cap is moving more in our favor. We are working on that.”

Like other automobile manufacturers, Daimler’s business was negatively impacted by the global shortage of chips.

“We can currently sell more than we produce,” said Kallenius

Categories
Health

Medical doctors Accuse UnitedHealthcare of Stifling Competitors

UnitedHealth is competing directly with U.S. Anesthesiology, according to the lawsuit in Texas, through an interest in Sound Physicians, a large medical practice that provides emergency and anesthesiology services. Sound Physicians plans to expand into markets like Fort Worth and Houston, and US Anesthesia alleges in the lawsuit that its doctors were contacted by Sound Physicians to persuade them to leave and the non-compete agreements in their contracts to work with the United Group in To ask a question.

The primary insurer is throwing its weight around in other ways, the lawsuit alleges. While the company’s Optum division, which runs the surgery centers and clinics, is technically segregated from the health insurer, doctors are accusing United of forcing OptumCare facilities to sever their ties with the anesthesia group and forcing the network’s surgeons to do theirs Operations to relocate hospitals or facilities that do not have contracts with US Anesthesia.

“United and its subsidiaries have expanded their tentacles to almost every aspect of the healthcare sector, enabling United to crush, suffocate and destroy any market participant who stands in the way of United’s higher profits,” the doctors claim in their lawsuit.

According to United, it is common for an insurer to sponsor the use of hospitals and doctors on its network.

Unlike many smaller medical groups struggling with the pandemic, United has maintained a strong financial position and propped up profits while elective surgeries and other legal proceedings have been suspended, resulting in fewer medical claims. The company was therefore expanded further, more doctors were hired and additional practices were bought up. The company plans to add more than 10,000 salaried or affiliate doctors this year.

The relationship between insurers and providers has become more complicated as more and more insurers own groups of doctors or clinics. “You want to be the referee and play on the other team,” said Michael Turpin, a former United CEO who is now executive vice president of USI, an insurance broker.

Employers who rely on UnitedHealthcare to insure their employees have difficulty assessing who will benefit when insurers fail to reach an agreement to keep a provider on the network. “This is as much about profit as it is principle,” said Turpin.

Categories
Business

Pandemic heats up state tax competitors to draw companies, residents

sturti | E + | Getty Images

Tax competition between states to attract and retain businesses and residents has persisted for decades. The national migration pattern has generally evolved from cold northern states with high taxes to warm southern and southwestern states with low taxes.

Retirees who are no longer tied to a job or are raising children have been an integral part of the caravan of migrants heading south. However, for all but the richest, taxes are usually not the main factor.

“I think most retirees who move are about quality of life,” said Ryan Losi, CPA at Piascik in Richmond, Virginia. “The [lower] Taxes are the icing on the cake for them. “

The icing on the cake, however, is itself becoming the cake for a larger number of Americans. With tax rates expected to rise, government income, property and sales taxes are becoming bigger factors in deciding where to live and work for both individuals and business owners.

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Losi has had numerous calls from wealthy clients – especially business owners – since November to discuss a possible move to a low-tax country.

“I’m not talking about seniors,” he said. “These are people who will earn income for another 20 to 30 years.

“They see their states continue to raise income and corporate taxes, so they want to migrate elsewhere,” he added.

While taxes aren’t the only problem driving migration patterns, they are clearly a consideration.

Last year, California, Connecticut, Illinois, New Jersey and New York were the five states with the highest rates of outbound migration, according to the 2020 National Movers Study published annually by United Van Lines.

Four of these five states were classified by the tax foundation in the bottom five states in terms of the business tax climate in 2021. Illinois ranked 36th.

“High-tax countries are under more pressure today than they have been for a long time,” said Jared Walczak, vice president for state projects at the tax foundation. He said the pandemic and the generally positive remote work experience of millions of Americans over the past year are adding to the pressure.

“The growth of the remote work environment is an extremely big development,” he said. “Increasingly, people and businesses can choose where to settle.”

Most experts expect more people and companies to choose where to pay lower taxes. The relocations of well-known technology companies such as Oracle and Hewlett Packard from California’s Silicon Valley to Texas are just the best-known examples. Any business capable of operating remotely is likely to take its tax footprint far more seriously now.

“If a company is big enough and has offices across the country, it can assign people who work remotely to offices in low-tax countries,” said Walczak. “I think a lot more companies will want to offer their employees remote-friendly circumstances.”

This prospect is likely to keep many state tax administrators awake at night. Six states, including Connecticut, New York, and Pennsylvania, have “convenience” rules that allow them to tax employees of companies in the state even if they do not live or work in the state.

Massachusetts, which has an income tax rate of 5%, introduced such a rule last year in response to the pandemic. It is currently being sued by the state of New Hampshire, which has no income tax and has attracted many remote Massachusetts workers.

The remote working problem is likely to lead to further conflict between state tax authorities. It will certainly challenge high tax countries that seek a faster-eroding tax base.

“High-tax countries are like aircraft carriers – they spin slowly,” Losi said. “If they see more migration, they will have a shortage of income and greater difficulty in funding their obligations. These states are in great trouble.”

Many are currently doing better financially than expected. This is in large part due to federal coronavirus relief packages, particularly state-taxed increased unemployment benefits and healthy property tax revenues and capital gains from the still buoyant property and stock market, Walczak said. 42 states tax capital gains.

He suggests that high-tax countries do not overreact when more residents leave the state.

“If they put taxes on those who are left, it could be a self-fulfilling prophecy that will ensure more people leave,” he said. “California and New York don’t need Florida or Texas tax codes to compete for residents and businesses, but they can’t go in the opposite direction.”