Bitcoin News Australia

We read his lips and Joe Biden said he’s raising taxes, but so far it’s all talk.

At least that’s according to an analysis of his tax policies conducted by the Urban-Brookings Tax Policy Center and published by The New York Times on Monday, which posits that the president has in fact slashed taxes through his first three-years-and-change in office.

The Tax of Life

Biden has spoken at length recently about his desire to raise taxes on the wealthy and the biggest of corporations. At his State of the Union address, Biden proposed increasing the minimum corporate tax rate to 21% from 15% on businesses that report annual profits of $1 billion or more, a tax levied by the 2022 Inflation Reduction Act. Biden also proposed increasing the overall corporate tax rate to 28% from 21%, bumping a stock buyback tax to 4% from 1%, and imposing a 25% minimum tax rate on individuals worth more than $100 million.

But dreams of a 21st-century New Deal have been squashed by the same old DC roadblocks: gridlock and compromise. According to the analysis by the Urban-Brookings Tax Policy Center, a liberal-leaning think tank, those political hurdles have led the administration to effectively lower the nation’s total tax burden by $600 billion over Biden’s term. The cuts have been felt by both companies and citizens alike:

• Individuals, particularly in the middle and lower class, have received a variety of tax cuts from Biden-passed legislation, including the expanded child tax credit from the 2021 stimulus bill, and cuts and incentives from the climate-focused IRA bill for people who buy tech like heat pumps or EVs.
• Companies, meanwhile, benefited from other climate-focused tax incentives from the IRA by investing in or manufacturing emissions-reducing equipment and tech. Tax breaks from the semiconductor-focused 2022 Chips and Science Act have also played a role in the net reduction of taxes, the analysis found.

The report looked solely at changes to the tax code during Biden’s tenure, meaning it excludes the impacts of inflation as well as certain costs associated with new regulations.

Our new Cold War has its first major sea battle. 

The Financial Times reported on Monday that China and Russia are challenging an area of seabed that the US wants to claim to pursue deep-sea mining. Previous arguments have revolved around whether anyone should be deep-sea mining at all, given the risk to ecosystems. Now, we’re moving on to the “who gets to potentially damage the ecosystems first” stage of the debate.

Entrenched Sides

Deep-sea mining is starting to turn from theory into industrial reality. It involves sending machines to the seafloor to pick up nodules — mineral deposits the size of a potato — that have formed over millions of years. These nodules contain minerals such as cobalt, nickel, and manganese, which are extremely valuable to the battery-building industry, making them just as valuable to the electric vehicle industry.

While some countries including Germany and France have argued that no one should be mining these nodules, China, the US, and a few others are raring to go.

Exactly where you can prospect for ultra-valuable potatoes is dictated by a 1982 UN treaty called UNCLOS (the United Nations Convention on the Law of the Sea). The US has never ratified UNCLOS, and China (ratified in 1996) and Russia (ratified in 1997) are using that as a wedge issue:

• Per the FT, the US said last December it was looking to extend its marine area of jurisdiction to include a particularly mineral-rich area that lies on its continental shelf. While a source said nations have the right to try to expand their jurisdictions, China and Russia are pushing back by arguing that the US doesn’t have that right without ratifying UNCLOS.
• For some US lawmakers, there is an immediate concern that if the country doesn’t get into deep-sea mining in a big way, China will dominate the field and control a crucial part of the battery supply chain.

The gaping potholes that have emerged on the road to the EV future have swallowed another startup.

Fisker’s stock tumbled further on Monday (hard to do from 12 cents a share), and the company’s ability to stay in business appears in jeopardy following its announcement that a partnership deal with a larger automaker had broken down. 

Not Enough Charge

EVs are more popular and well-designed than ever, but even the biggest carmakers — General Motors, Ford, and Mercedes-Benz — have had to scale down or slightly delay their plans as demand slows. 

Startups like Fisker — which don’t have decades’ worth of customer loyalty, expansive facilities, or tens of billions of dollars at their disposal — face an even tougher uphill climb:

• In February, Fisker announced it was negotiating with another carmaker for some kind of partnership that could have involved an investment, joint development, or use of the automaker’s facilities. The Wall Street Journal reported earlier this month that the company had hired advisers to help with a possible bankruptcy filing.
• As a result of the partnership deal falling through, Fisker said it wouldn’t be able to meet the closing condition of a $150 million financing commitment that it had entered into with an investor, according to The Wall Street Journal. Earlier this month, Fisker paused production for six weeks, and on Monday, its share price fell another 28% to just under 9 cents a share. The stock was trading near $7 as recently as last September.

And it’s not just little guy Fisker asking for help. The need to team up is being seen throughout the industry. Nissan, a nearly 100-year-old company, plans to cut the cost of its EV manufacturing by 30% thanks to partnerships with France’s Renault and Honda, per the Financial Times.