Trump said he doesn't see a recession after the bond market spooked investors and the Dow suffered its worst day of the year last week.Marketsread more
The U.K. prime minister prepares to meet his German and French counterparts this week.Europe Politicsread more
Amazon is raising seller fees for thousands of small and medium-sized businesses in France because of a new digital tax passed by the French government.Technologyread more
U.S. stock index futures point to a higher open on Monday morning as the White House sought to calm investors over growing concerns about the U.S. economy.US Marketsread more
Ahead of the deadline, U.S. President Donald Trump told reporters that Huawei was a national security threat.Technologyread more
Bianco Research's James Bianco suggests Wall Street is desperately looking for a signal that a 50 basis point cut is coming next month.Trading Nationread more
Baidu is gearing up to release its second-quarter earnings on Monday with the market expecting a sharp decline in profit.Technologyread more
Americans now say they approve of free trade by 64%-27%, a margin of better than two to one. That's up from 57%-37% early in Trump's presidency, and 51%-41% near the end of...Politicsread more
Stocks in Asia rose on Monday as U.S. Treasury yields bounced higher after plunging last week.Asia Marketsread more
The problem with tanking equities lies elsewhere, writes Michael Ivanovitch, because traders see no end to America's unfolding trade disputes with Europe and China.World Economyread more
Beijing wants to use reforms to support a slowing economy.China Marketsread more
During Tuesday night's Democratic presidential debate, many of the candidates called for ending a favorite tax break of the rich. And now they have some unlikely allies: billionaire, conservative hedge fund managers.
In Wednesday's Financial Times, hedge fund manager and longtime Republican supporter Leon Cooperman said that while he opposed a wealth tax, he supports eliminating a feature of the tax code known as the "step-up in basis" for capital gains.
The step-up basically allows billionaires like Bill Gates or Warren Buffett to pass billions of dollars to their heirs or to charity without ever paying taxes on it. The step-up costs the government between $30 billion and $60 billion a year, and almost all of the benefits go to the wealthiest Americans.
Former vice president and now presidential candidate Joe Biden was the first to propose ending the step-up, at the very beginning of his campaign. But now, most of the other candidates have signed on.
"I don't really think capital gains promote investment as much as advertised," he said.
Cooperman agrees. In his op-ed, he advocated removing "biases built into the tax code that frustrate the objective that everyone pay their 'fair share' " — and specifically targeted the step-up.
"Some wealthy business owners largely avoid paying income taxes by taking very little out of their companies in the form of salary or dividends and sitting on massive unrealized gains in their stock that can then be bequeathed to charity with no tax ever being paid," Cooperman wrote. "Closing that loophole would help underwrite even some of the most ambitious legislative programmes."
The growing chatter around step-up is a sign of a much broader change in the discussion of inequality. For years, conservatives emphasized mobility and opportunity over inequality, and supported spending cuts rather than higher taxes. But now, CEOs, billionaires, entrepreneurs and the biggest investors argue that too many Americans are being left behind by technology and globalization and that the tax code needs to be adjusted.
The step-up is one loophole that both conservatives and Democrats agree is difficult to justify in an age of huge stock-based fortunes that will never be taxed, while everyday wage earners pay up to 37% on their income.
The step-up isn't likely to change anytime soon, since there are no bills from either Democrats or Republicans in Congress to eliminate it. But that could change after the election, regardless of who wins.