Tag: profits

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Politics

Warren Plans to Suggest Minimal Tax on Company Income

Warren Plans to Propose Minimum Tax on Corporate Profits

Massachusetts Senator Elizabeth Warren and her allies will propose a minimum tax on the profits of the nation’s richest corporations, regardless of what they say they owe the government, as part of the Democrats’ $ 3.5 trillion economic and social package.

Ms. Warren’s so-called “real corporate income tax” was an important part of her presidential campaign, and she has enlisted Senator Angus King, of Independent Maine, to support her case that profitable corporations should be taxed regardless of loopholes and maneuvers that many of them do have made it possible to avoid state corporation tax altogether.

The move would require the most profitable companies to pay a 7 percent tax on the profits they report to investors – known as the annual book value – over $ 100 million. By taxing the revenues reported to investors, not the Internal Revenue Service, the Democrats would be making profits that companies would like to maximize, rather than the revenues they are trying to reduce for tax purposes.

“During the presidential campaign, Joe Biden and I were at odds on some tax policies, but we strongly agreed on one thing: Corporations shouldn’t be able to tell their shareholders they were making huge profits and then tell the IRS that they were not making a profit . ”“ Ms. Warren said in an interview.

Following the passing of a $ 1 trillion bipartisan infrastructure bill expected this week, Democrats will turn to a draft budget that sets out the terms of a sprawling multi-trillion dollar package that will support the rest of their ambitions of strengthening and paying for the nation’s social safety net by increasing taxes on wealthy individuals and businesses. If it releases the Senate, it is almost guaranteed as only the votes of the 50 Senators who join with the Democrats come in.

This package will not be fully implemented until the fall, but the unveiling of the sober draft has spurred Democrats like Ms. Warren to offer their proposed contributions. While suggestions on topics like free pre-K, community college, and family vacations have attracted a lot of attention, how it is paid, including the proposed tax hikes for the wealthy and businesses, will generate at least as much controversy. The campaign to further screen wealthy businesses was supported by reports from ProPublica showing that the richest Americans pay very little in taxes.

“Now is the time to put the revenue on the table to pay for our infrastructure plans – this is the time,” said Ms. Warren.

In a separate interview, Mr. King responded to the expected Republican criticism by saying, “This is not socialism – it is an attempt to have a fair tax at a fairly low level for companies that would otherwise pay zero.”

An economic analysis by Gabriel Zucman and Emmanuel Saez, economics professors at the University of California, Berkeley, who advised Ms. Warren during the presidential campaign, estimated that around 1,300 public companies would be affected by politics, generating nearly $ 700 billion by 2023 would and 2032.

“We understand that responsible legislation includes how it’s paid and These payments come from the billionaires and giant corporations who have avoided paying their fair share for so long, ”Ms. Warren said. “In order to get the tax revenue part of the reconciliation package right, the point is to make the competitive conditions a little more balanced for everyone.”

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Health

How Emergent BioSolutions Earned Earnings However Delivered Disappointing Vaccine Returns

How Emergent BioSolutions Earned Profits But Delivered Disappointing Vaccine Returns

After placing the no-bid contract with Emergent, the Trump administration reverted to traditional contract rules and looked for competitive proposals for additional fillings and packaging, known in the industry as fill-finish work, the documents show. Ology Bioservices, based in Alachua, Fla., Agreed to provide essentially the same services as the Camden and Rockville Emergent plants for three quarters to nearly one third the cost, according to a contract-based calculation.

According to an agreement made in August, Ology would collect state fees of $ 6.83 per vial. By comparison, Emergent’s existing lines would cost between $ 9.03 and $ 18.40 per vial.

A health department spokeswoman said Ology is cheaper in part because it can fill more than 100,000 vials in a single batch, which is five times that of Emergent. This “lowers the price per bottle by spreading the fixed costs over more bottles,” she said in an email.

Even after the launch of Ology, the government continued its higher-cost agreement with Emergent to ensure “additional capacity is available when or when it is needed to fill vaccines or therapeutics,” she said. At the time of the deal, former and current federal officials said the government wanted to secure as much manufacturing capacity as possible before commercial companies buy it out.

Over the years, Emergent has grown by funding the expansion of its manufacturing facilities and the accumulation of product reserves.

In November 2019, the company announced that it would double its sales, including by expanding its contract manufacturing business. A senior vice president, Syed Husain, outlined a “game plan” that would “cross-sell additional services” to existing customers, including the federal government. Six months later, Emergent signed the contract that expanded its existing government contract to include work in its Camden and Rockville locations.

Dr. Robert Kadlec, a former Trump administration official who oversaw the agency that awarded Covid-19 contracts, had previously worked as a consultant for Emergent. Dr. Kadlec has said that he did not negotiate the emergent deal but approved it. Emergent said it negotiated the agreement with professional government officials.

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Politics

Pfizer Reaps Lots of of Hundreds of thousands in Income From Covid Vaccine

Pfizer Reaps Hundreds of Millions in Profits From Covid Vaccine

Several factors explain the inequality in Pfizer’s vaccine distribution.

The shot, which must be stored and transported at very low temperatures, is less practical for hard-to-reach parts of the world than other shots such as those from AstraZeneca and Johnson & Johnson that can simply be refrigerated. Some poor countries were not hit badly by the virus initially, so their governments had less urgency to place orders for the Pfizer vaccine as far as they could afford to pay for the shots.

“Not everyone was interested in the vaccine or willing to take steps. As a result, talks will continue, including working with Covax beyond the original 40 million cans, ”said Ms. Castillo, Pfizer spokeswoman.

In India, where the virus is spiraling out of control, the Pfizer vaccine is not used. The company applied for an emergency permit there, but withdrew the application in February because the Indian Medicines Agency was unwilling to waive the requirement to conduct a local clinical trial. At the time, India’s coronavirus case numbers were manageable and vaccines made locally were considered sufficient.

Pfizer and the Government of India have since resumed talks. On Monday, Mr Bourla said the company would donate more than $ 70 million worth of drugs to India and is trying to expedite vaccine approval.

Pfizer has made public promises to run its business not only for the enrichment of shareholders but also for the betterment of society.

Mr. Bourla, who earned $ 21 million last year, was among the 181 leaders of large companies who signed a 2019 Business Roundtable pledge to focus on a range of “stakeholders” including workers, suppliers and local communities – not just investors.

The financial numbers Pfizer reported Tuesday underestimate how much money the vaccine will generate. Pfizer is splitting its vaccine sales with BioNTech, which will publish its own first quarter results next week. BioNTech announced in March that it had achieved sales of nearly 10 billion euros, or around 11.8 billion US dollars, based on the vaccine orders it had ordered at the time.

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Business

Apple doubles its earnings on hovering iPhone gross sales.

Apple doubles its profits on soaring iPhone sales.

Apple said Wednesday that its earnings more than doubled to $ 23.6 billion in its most recent quarter as people adopted its latest iPhones and bought more of its other products. This is an impressive result for what is already the world’s most valuable company.

According to Apple, sales rose 54 percent to $ 89.6 billion. That was a record for the March quarter, with Apple selling an average of more than $ 1 billion a day. The rapid growth is partly due to slower sales in the same three-month period last year when the pandemic first started. However, the quarter on its own was still strong and far exceeded analysts’ expectations. Apple’s sales grew sharply in each of its product categories and in each of its regions around the world.

As always, the main driver of Apple’s success was the iPhone. According to Apple, iPhone sales rose 66 percent to $ 47.9 billion. This is the biggest increase in years. The company’s flagship accounted for more than half of its total sales for years. More recently, however, Apple has been trying to expand into other businesses, causing the share of iPhone sales to drop to 41 percent for the quarter ending September 30th, Apple unveiled the iPhone 12 in October, and sales have increased . In the last quarter, iPhones made up 54 percent of Apple’s sales.

IPad sales increased 79 percent and Mac sales increased 70 percent, according to Apple. Part of its success was due to more people working on computers and learning from home. Sales of Apple wearable devices, including the Apple Watch and AirPods, rose 25 percent, and the Services division, which includes app sales and subscriptions to iCloud and other Apple services, rose 26 percent.

Apple said Wednesday that it would buy back an additional $ 90 billion of its own shares as part of its ongoing program to return much of its profits to shareholders.

The huge profits are further evidence of the growing dominance of the largest tech companies. Also announced this week: Microsoft’s profit rose 44 percent to $ 15.5 billion. Facebook’s bottom line nearly doubled to $ 9.5 billion. and profits at Alphabet, the parent company of Google, more than doubled to nearly $ 18 billion. Amazon reports its profits on Thursday.

Apple’s continued growth is based on an increasing scrutiny of its power. The company is facing antitrust investigations from regulators around the world. On Monday, Apple will stand trial against Epic Games, one of the world’s largest game manufacturers, to gain control of the App Store.

Apple shares, valued at roughly $ 2.25 trillion, rose nearly 2 percent in after-hours trading.

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Business

Unintentional actual property flippers are raking in shocking earnings

Unintentional real estate flippers are raking in surprising profits

An aerial view of the Rockybrook Estate in Delray Beach, Florida

Douglas Elliman

Ten days after closing the most expensive mansion sale of the year in Delray Beach, Florida for $ 19 million, luxury real estate agent Senada Adzem received an unexpected phone call.

“The buyer called me to say they were going to sell the house. In all honesty, we were surprised,” Adzem said in an interview. She related how the buyer said his plans had changed. He and his family could no longer move to Florida.

“I’ve never been in a situation where the client invested so much time and effort buying a dream home – only to turn it over and sell it less than two weeks later,” said Adzem.

The client re-listed the property known as “The Rockybrook Estate” at $ 23 million, which was $ 4 million more than he paid for it a few weeks earlier. Adzem said she expected the unintended short-term flip to pay off.

“With the glowing luxury market in South Florida and the dazzling splendor of this resort-style property, we are confident that the seller has an excellent opportunity to make significant profit on this deal,” she said.

The scenario is not an isolated one. It is playing out in several U.S. real estate markets as the rising value of stocks and other assets has helped increase the purchasing power of the rich. Because many of these buyers want to live in a limited number of markets, luxury home availability can be tight.

The amazing room at the Rockybrook Estate in Delray Beach, Florida.

Douglas Elliman

Low stocks

Delray Beach is a good example. The multimillion dollar inventory of luxury items in the city on Florida’s southeast coast is at a 10-year low, down 45% from 2020, Adzem said. In the first quarter, the average sales price for a luxury single-family home there rose by more than 53.7% compared to the previous quarter, according to the Elliman report.

“The low inventory of megamansions, especially in a booming property market like South Florida, has a positive impact on the seller,” she said.

The same day this home was sold at 14 Sandy Cove, Newport Beach, California, the buyer decided to put it up for sale.

Photo: PreviewFirst / Stavros Group

In Southern California, realtor Andy Stavros also had a buyer who turned into an accidental pinball machine. Stavros sold his client a $ 8.7 million home at 14 Sandy Cove in Newport Beach, California. On the same day it closed, Stavros said the buyer had decided to put it up for sale.

A view of the back yard at 14 Sandy Cove in Newport Beach, California.

Photo: PreviewFirst / Stavros Group

Stavros said his client’s plans changed because she saw and bought a bigger house in the area for $ 13 million. That meant she no longer needed the four-bedroom, eight-bath house she had just bought. When she asked Stavros to sell it, its price was $ 8.9 million.

The view of 14 Sandy Cove in Newport Beach, California.

Photo: PreviewFirst / Stavros Group

According to Stavros, his client didn’t want to make money, but it could happen. Potential buyers called before the listing went online.

“All at once I have several requests,” he said.

Deciding to sell a multimillion dollar property the same day you close it is usually not a profitable strategy. However, if the property is desirable and in a hot, low inventory market, an accidental house flipper can make a sizeable profit, according to Devin Kay, South Florida real estate agent.

“We are surprised daily by what things are being sold for,” said Kay.

Properties in demand

La Gorce Island is a small gated community that Cher, Ricky Martin, and Billy Joel once called home. Wyden said he intends to demolish the obsolete 4,500 square foot residence on the half-acre property and build a larger new home.

“Immediately after my contract was signed someone offered $ 400,000 for my contract,” said Wyden in an interview. He added that he declined the offer because he wasn’t a pinball machine. He and his wife planned to move to La Gorce Island permanently, and a few hundred grand profits wouldn’t change their plans.

“The intention with my wife was to build a house,” said Wyden.

However, soon after, the Wydens found they weren’t facing all the headaches of building a new house and instead made an offer for another house in South Florida. In February, they re-listed the unimproved property at 31 La Gorce Circle for $ 5.5 million – a whopping $ 1.35 million more than they paid for it.

“I thought people might say I was crazy or there might be a bidding war,” said Wyden.

Even Kay, the Wydens real estate agent, was shocked when he sold the property at full price six days after it was re-listed. “I had no faith in my head that we would get $ 5.5 million for it,” he said.

Wyden said, “I’m not in the real estate speculation business,” but just like the stock market, prices inevitably go up when demand goes up and supply goes down. La Gorce Island is only 2 km² so there is a very limited supply of houses and even fewer opportunities for demolition to develop.

“Due to a highly competitive market and the fact that there was nothing else for sale, we were able to turn it around with a profit of 33%,” said Wyden. He added, “I probably under-sold it. I could probably have got six [million dollars] for this.”

Wyden’s Flip outperformed the Miami Beach market, where luxury single-family home sales prices rose 20.2% quarter over quarter in the first quarter, according to the Elliman Report.

Not just luxury markets

And it’s not just luxury markets that see very profitable, unintended flips. Los Angeles real estate agent Spencer Daley made a surprising profit on a brief move in Idaho.

“These are prices Boise has never seen before. This is new territory,” Daley said in an interview.

Douglas Elliman real estate agent, 31, bought property in the town of Caldwell in September. It was a vacant three-acre lot overlooking the Timberstone Golf Course in an off-course subdivision about 20 minutes from Boise. Real estate records show he paid $ 120,000 for it.

“It wasn’t like I bought it and I was going to turn it over,” said Daley. “I bought the land to actually build on.”

He had the architectural plans and received a cost of about $ 380,000 to build it. Daley figured it would take a year to complete the project and then planned to bring the house to market for somewhere north of $ 600,000.

But three months after buying the property, Daley said something he never expected had happened: a buyer called with an off-market offer he couldn’t refuse. He sold the property for $ 250,000.

“It was more than twice what I paid for it,” said Daley.

Warren Johns is the local real estate agent licensed by Mountain Realty who was representing Daley. Johns said he helped another customer, also an accidental pinball machine, buy and sell a vacant lot on the same street. According to Johns, the buyer paid $ 95,000 for the lot and sold it for $ 250,000.

The accidental flip earned its client more than 163% of their original investment in less than five months.

The supply of real estate on a golf course in the Boise metropolitan area is low, said Johns. The properties in the Timberstone area also have an added benefit that also fueled demand. He said it was one of the few subdivisions in the region where raffle buyers can bring in their own contractor.

“Builders were unable to get into other developments controlled by other powerful builders,” so these builders came to the Timberstone subdivision as land buyers to develop and then sell. Both lots that Johns helped his clients turn over went to buyers who were builders, and he has a third lot in the subdivision that is now also under contract with a contractor.

Daley said a huge short-term gain made his decision obvious.

“If the win is there and the risk is less, I don’t know why you wouldn’t,” he said. “I made more money selling the property than selling a finished home.”

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Business

Company Income Anticipated to Rally because the Economic system Recovers: Dwell Updates

Coca-Cola, United Airlines, Netflix, AT&T and American Express are expected to issue earnings results this week.

Here’s what you need to know:

Credit…Scott Olson/Getty Images

First-quarter earnings season picks up steam this week, with analysts expecting that profits for S&P 500 companies rose roughly 27 percent in the three months through March, compared with a year earlier when the pandemic sent corporate earnings into a tailspin.

Companies such as Coca-Cola, United Airlines, Netflix, AT&T and American Express all slated to issue results this week, offering a relatively well-rounded look at the state of corporate America in the early days of what could be a powerful year for the U.S. economy. It might also help set expectations for the stock market, after a big rally already this year.

The consensus among 76 economists polled by Bloomberg is that gross domestic product will expand by 6.2 percent in 2021, which would make it the best year for economic growth since 1984. And sentiment among analysts covering the stock market is almost universally bullish, given that strong economic tailwind.

“You’d almost have to be self-deceiving to expect U.S. companies overall to underperform consensus, given how the macro backdrop is driving revenues so well,” wrote John Vail, chief global strategist at Nikko Asset Management.

The expectations for profit growth are even more elevated for the current quarter: Analysts expect that the three months ending in June will see companies in the S&P 500 notch a 54-percent rise in profits, compared with the prior year.

That increase, of course, reflects a rebound from the worst of the pandemic-bred downturn. But it also is a result of “economic re-acceleration, and a rebound in commodity prices,” said Jonathan Golub, a stock market analyst at Credit Suisse.

Of course, if everyone is expecting such a surge in profits, the good news could already be fully incorporated into stock prices — and that means anything short of perfect results would make for a difficult stretch for stocks.

That has certainly been the case with some of the banks that reported earnings last week. Shares of Morgan Stanley, for example, dropped 2.8 percent on Friday even though the bank reported record revenue and profit.

The S&P 500 is already up more than 11 percent in 2021, and hit yet another record high on Friday.

That could mean the market is due for a pullback anyway. The index is relatively expensive by metrics such as the price-to-earnings ratio, which compares stock prices as a share of expected corporate profits over the next 12 months.

The S&P 500 is trading at nearly 23 times expected earnings. That’s roughly the valuation the index has held for most of the past year, but it’s very high by historical standards.

Over the last 20 years, the S&P 500 has traded at an average of 16 times expected earnings.

By comparison, a valuation of 23 times expected earnings is closer to where stock market valuations stood at the tail-end of the dot-com bubble of the late 1990s. When that ended, the S&P 500 fell roughly 50 percent before it hit bottom.

ABN Amro’s head office, center, in Amsterdam. An inquiry by Dutch authorities found the bank ignored signs that some clients were criminals using it as a conduit for dirty money.Credit…Peter Dejong/Associated Press

The Dutch bank ABN Amro said Monday that it would pay a $580 million fine to settle money laundering charges, prompting a former ABN manager to resign his new job as chief executive of Danske Bank after acknowledging he was a target in a related criminal investigation.

The resignation of Chris Vogelzang is an embarrassment for Danske Bank, Denmark’s largest bank, which hired him in 2019 to rebuild trust following a money laundering scandal there. Before becoming chief executive of Danske, Mr. Vogelzang had been a member of the management board of ABN Amro responsible for retail and private banking services.

Mr. Vogelzang acknowledged that Dutch authorities considered him a suspect in the investigation that led ABN Amro to agree to pay 480 million euros to settle money laundering charges. In numerous cases, according to a report by Dutch authorities, ABN Amro ignored warning signs that some clients were criminals using it as a conduit for dirty money.

Mr. Vogelzang said in a statement that he was “surprised” to learn that Dutch authorities consider him a suspect. During his time at ABN Amro, he said, “I managed my management responsibilities with integrity and dedication.”

Noting that Danske Bank remains under “intense scrutiny” because of money laundering at its former unit in Estonia, Mr. Vogelzang said he did “not want speculations about my person to get in the way of the continued development of Danske Bank.”

Danske named Carsten Egeriis, previously the bank’s chief risk officer, to succeed Mr. Vogelzang.

Gerrit Zalm, a member of Danske’s board who was chief executive of ABN Amro from 2009 to 2017, will also resign, the bank said. It did not give a reason.

Danske Bank admitted in 2018 that its headquarters and its Estonian branch, which it has since closed, failed for years to prevent suspected money laundering involving thousands of customers.

In the ABN Amro case, Dutch authorities found that the bank failed to act on obvious signs of illicit activity, including large cash transactions. In several cases, authorities said, the bank continued to serve clients whose criminal activities had been reported by the media, or who had a known history of fraud.

“As a bank we do not merely have a legal, but also a moral duty to do our utmost to protect the financial system against abuse by criminals,” Robert Swaak, the ABN Amro chief executive, said in a statement. “Regretfully, I have to acknowledge that in the past we have been insufficiently successful in properly fulfilling our important role as gatekeeper.”

More people are flying every day, as Covid restrictions ease and vaccinations accelerate. But dangerous variants have led to new outbreaks, raising fears of a deadly prolonging of the pandemic.

To understand how safe it is to fly now, The Times enlisted researchers to simulate how air particles flow within the cabin of an airplane, and how potential viral elements may pose a risk.

For instance, when a passenger sneezes, air blown from the sides pushes particles toward the aisle, where they combine with air from the opposite row. Not all particles are the same size, and most don’t contain infectious viral matter. But if passengers nearby weren’t wearing masks, even briefly to eat a snack, the sneezed air could increase their chances of inhaling viral particles.

How air flows in planes is not the only part of the safety equation, according to infectious-disease experts. The potential for exposure may be just as high, if not higher, when people are in the terminal, sitting in airport restaurants and bars or going through the security line.

“The challenge isn’t just on a plane,” said Saskia Popescu, an epidemiologist specializing in infection prevention. “Consider the airport and the whole journey.”

Credit…Robert Neubecker

Members of the National Association of Realtors — the nation’s largest industry group, numbering 1.4 million real estate professionals — are challenging a moratorium on evictions put in place by the Centers for Disease Control and Prevention.

Both the Alabama and the Georgia Associations of Realtors sued the federal government over the matter, and the national association is paying for all of the legal costs. A hearing is scheduled for April 29, Ron Lieber reports for The New York Times.

The N.A.R. spends more money on federal lobbying than any other entity, according to the Center for Responsive for Politics. To puzzle out its actions and advocacy, let’s first be crystal clear about what the N.A.R. is and whose interests it serves. As its own chief executive boasted to members in 2017, it’s really the National Association for Realtors, not of them.

And of those million-plus members, according to the association, about 38 percent own at least one rental property. The N.A.R. isn’t shy about this, stating on the lobbying section of its website that it wants to “protect property interests.”

Why would it do this? The N.A.R. expert on the topic was unable to schedule a phone call, according to a spokesman.

But if you’re selecting a listing agent for your house from among their members, ask that person about this issue if you’re curious or concerned. Many of them have no idea what the N.A.R. is advocating on their behalf.

Credit…Illustration by The New York Times; Photo by Alexander Drago/Reuters

Here come the lobbyists.

The cryptocurrency exchange Coinbase, the asset manager Fidelity, the payments company Square and the investment firm Paradigm have established a new trade group in Washington: The Crypto Council for Innovation. The group hopes to influence policies that will be critical for expanding the use of cryptocurrencies in conjunction with traditional finance, Ephrat Livni reports in the DealBook newsletter.

Cryptocurrencies are still mostly held as speculative assets, but some experts believe Bitcoin and related blockchain technologies will become fundamental parts of the financial system, and the success of businesses built around the technology may also invite more attention from regulators.

“We’re going to increasingly be having scrutiny about what we’re doing,” Brian Armstrong, Coinbase’s chief executive, said on CNBC. “We’re very excited and happy to play by the rules,” he added, but regulation of crypto should be on a “level playing field with traditional financial services.”

Here are four of the issues that will keep crypto lobbyists busy:

  • The Crypto Council’s first commissioned publication is an analysis of Bitcoin’s illicit use, and it concludes that concerns are “significantly overstated” and that blockchain technology could be better used by law enforcement to stop crime and collect intelligence.

  • New anti-money-laundering rules passed this year will significantly expand disclosures for digital currencies. The Treasury Department has also proposed rules that would require detailed reporting for transactions over $3,000 involving “unhosted wallets,” or digital wallets that are not associated with a third-party financial institution, and require institutions handling cryptocurrencies to process more data.

  • When is a digital asset a security and when is it a commodity? Bitcoin and other cryptocurrencies that are released via a decentralized network generally qualify as commodities and are less heavily regulated than securities, which represent a stake in a venture. Tokens released by people and companies are more likely to be characterized as securities because they more often represent a stake in the issuer’s project.

  • The Chinese government is already experimenting with a central bank digital currency, a digital yuan. China would be the first country to create a virtual currency, but many are considering it. Some crypto advocates worry that China’s alacrity in the space threatens the dollar, national security and American competitiveness.

Peloton shares were lower in premarket trading after the U.S. Consumer Product Safety Commission issued a safety warning about the company’s treadmill.Credit…Roger Kisby for The New York Times

European stocks were mixed on Monday, and U.S. stock futures drifted lower, at the beginning of a week when hundreds of public companies will report earnings, including Coca-Cola, Netflix and United Airlines.

The Stoxx Europe 600 rose 0.1 percent, pushing further into record territory. The European index has climbed for the past seven weeks. On Wall Street, the S&P 500 hit a record on Friday after a string of strong economic reports and company earnings. On Monday, futures indicated it would open about 0.4 percent weaker.

European government bond yields climbed higher on Monday as investors awaited the European Central Bank’s latest monetary policy decisions, which will be announced on Thursday. Last month, the central bank said it would quicken the pace of its asset purchases to tamp down an increase in bond yields.

  • Peloton shares dropped nearly 6 percent in premarket trading after the U.S. Consumer Product Safety Commission issued an “urgent warning” about the exercise equipment company’s treadmill. The agency said users with small children at home should stop using the machine after reports of injuries and one fatality.

  • Coinbase shares slipped nearly 4 percent in premarket trading with other crypto-related stocks. Over the weekend, the price of Bitcoin, the most popular cryptocurrency, plummeted by more than $7,000, or about 9 percent.

  • GameStop shares rose 6 percent in premarket trading as the video game retailer announced that its chief executive would be stepping down by the end of July. The company, which was at the center of a retail trading frenzy earlier this year, has been shaken up by the incoming chairman, Ryan Cohen, who is an activist investor in the company pushing for a digital turnaround.

  • Oil prices were slightly lower. Futures of West Texas Intermediate, the U.S. crude benchmark, fell 0.3 percent to just below $63 a barrel.

  • The U.S. dollar fell against other major currencies, including a 0.4 percent drop against both the euro and the British pound. It was also 0.6 percent weaker against the Japanese yen.

Categories
Politics

Biden tax plan recaptures $2 trillion in company income from abroad: Treasury

Biden tax plan recaptures $2 trillion in corporate profits from overseas: Treasury

President Joe Biden will receive an economic briefing with Treasury Secretary Janet Yellen in the Oval Office of the White House in Washington on January 29, 2021.

Kevin Lamarque | Reuters

Treasury Secretary Janet Yellen on Wednesday touted the Biden administration’s proposed changes to corporate tax law and stated at length that the plan would be fairer, reduce incentives for businesses to move factories and incomes overseas, and generate revenue for domestic priorities.

Tax officials said the Made In America tax plan, which is linked to President Joe Biden’s $ 2 trillion infrastructure overhaul, would bring about $ 2 trillion in corporate profits to the U.S. that are currently overseas.

The Treasury Department and the Joint Tax Committee have estimated that setting incentives for the offshore business could generate $ 700 billion in revenue.

Overall, Made In America’s reforms are estimated to raise an estimated $ 2.5 trillion over 15 years to fund eight years of spending on roads, bridges, transit, broadband, and other projects.

Biden spoke about his administration’s plan at the Eisenhower Executive Office Building in Washington on Wednesday afternoon.

“It’s not a plan that tinkers with the edges. It’s a one-time investment in America, unlike anything we’ve done since building the highway system and winning the space race decades ago,” said Biden.

“It’s a plan that will get millions of Americans to fix what’s broken in our country: tens of thousands of miles of roads and highways, thousands of bridges in dire need of repair. It’s also a blueprint of the infrastructure that is needed for tomorrow is needed, “he added.

The Treasury’s 17-page report is likely to serve as a draft for lawmakers looking to push one of the largest spending and tax proposals through Congress by 2021.

Key provisions of the plan include increasing the U.S. corporate rate from 21% to 28% and introducing minimum taxes on both foreign income and domestic profits that companies report to shareholders. All of this is expected to increase the tax burden on American companies.

“The largest and most profitable US companies face lower tax rates than ordinary Americans,” tax officials said in a presentation released on Wednesday. “The Made in America tax plan would reverse these trends. … The plan would remove distortions in existing tax laws that favor offshoring and largely end corporate profit shifting with a country-based minimum tax.”

Biden said Wednesday that he was ready to increase the corporate tariff by a smaller amount and that he was not married at 28%.

Corporate groups oppose the changes, claiming they will affect investment and the ability of US companies to compete in global business. The Treasury report claims that the 2017 tax cuts went too far with little economic benefit, pointing out that foreign investors received a significant share of the profits.

The White House proposal would also hit key elements of Trump’s 2017 corporate tax cut, including the property tax on erosion and anti-abuse, known as “BEAT”. Although designed to penalize companies that move profits overseas, the BEAT has been criticized for taxing some non-abusive transfers and missing those who employ tax avoidance strategies.

The president’s proposed minimum tax of 15% on book business income, aimed at those reporting high profits but low tax payments to investors, would only apply to businesses with profits greater than $ 2 billion, compared to the current level of 100 Million USD.

According to calculations by the Treasury Department, this could affect about 45 companies, with the average company exposed to the tax seeing an increased minimum tax liability of about $ 300 million per year.