Later this month at the Harry Reid International Airport in Las Vegas, the Transportation Security Administration will be launching a pilot program allowing passengers with TSA pre-check to choose a “self-service screening system” option. That means select fliers can pass through security checkpoints without any interaction with an airport employee — meaning they’ll only have themselves to argue with over whether or not their 6” Kindle has to stay in their backpack.
POLICY & POWER
Biden Proposes Boosting Minimum Tax Rate on Big Corporations
There are 735 billionaires in the US, according to Forbes. That’s a lot of wealth but not a lot of votes, which is good news for President Joe Biden.
During Thursday’s State of the Union address, Biden proposed increasing minimum tax rates for billionaires, as well as large corporations, while lowering them for less wealthy households.
Going After Fat Cats
Although the US has a base corporate tax rate of 21%, plenty of loopholes, breaks, and deductions exist that allow many of the biggest companies — like Amazon, Nike, and Salesforce — to avoid paying federal taxes altogether. Wealthy individuals also enjoy similar advantages.
As much as immigration, climate change, and candidate age are already hot-button issues in the lead-up to this year’s presidential election, the US economy, inflation, and taxes weigh heavily on voters’ minds. In his State of the Union address, Biden took aim at the richest of the rich Americans and corporations with the intention of making them pay their “fair share”:
The Inflation Reduction Act, which Biden passed in 2022, set a 15% minimum tax on corporations that report annual profits of $1 billion or more. On Thursday, he proposed raising that even further to 21% and bumping the overall corporate tax rate to 28% from 21% as well. He also asked lawmakers to increase the tax that companies pay on stock buybacks to 4% from 1%, with the goal of encouraging companies to put more money into their employees and facilities.
Biden proposed increasing the minimum tax rate to 25% for individuals worth more than $100 million. He also intends to crack down on corporations and individuals who use non-commercial planes by increasing fuel taxes on their private jet travel. On the opposite end of the wealth spectrum, Biden intends to cut taxes for middle- and low-income Americans by $765 billion over 10 years by increasing the Child Tax Credit and making lower, affordable healthcare premiums permanent.
(Not) All Things Must Pass: All of these stick-it-to-the-rich initiatives should excite Biden’s more progressive supporters, but they don’t stand much of a chance in Congress. Bloomberg’s Akayla Gardner and Laura Davison described his billionaire tax hikes as a “political longshot.” What isn’t these days?
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Novo Nordisk May Have Found an Even Better Anti-Obesity Drug
Turns out Wegovy was just an amuse-bouche.
Novo Nordisk, the Denmark-based maker of hit anti-obesity drug Wegovy (and its close diabetes treatment cousin Ozempic) has been trialing a successor to Wegovy called amycretin. On Thursday, it announced that in Phase I trials, the new drug had performed much better than Wegovy in helping participants to lose weight.
Double Trouble
According to Novo Nordisk, participants in the amycretin trial lost 13.1% of their body weight over 12 weeks. That’s much more rapid than Wegovy, which helps users lose around 6% of their weight over the same period. Wegovy and the craze for weight-loss drugs has already catapulted Novo Nordisk into the stratosphere, making it Europe’s most valuable company. The company said last month it would spend $11 billion to expand its weight-loss drug production capabilities, and its success is so huge that it’s had an observable effect on the Danish economy. News of the new drug’s development excited investors so much that it caused Novo Nordisk’s market cap to jump above Tesla’s.
But more potent drugs in the pipeline pose big questions around both demand and safety. A Bloomberg report published Thursday found that many weight-loss drug users are turning to unqualified TikTok influencers for advice on how to manage side effects:
Specialized obesity doctors are not as easy to come by as weight loss drugs. Bloomberg reports that while prescriptions for Ozempic have skyrocketed 5,000% since 2018, the number of certified obesity doctors has only doubled.
Moreover, some telehealth companies touting weight-loss drugs as part of their services don’t offer any kind of expert aftercare, Bloomberg reported.
Arms Race: It’s not just Novo Nordisk smashing the accelerator. Eli Lilly, which makes the anti-obesity drug Zepbound (closely related to its diabetes medication Mounjaro), is feverishly outsourcing production to keep pace with its Danish rival, the Financial Times reported on Tuesday. For both companies, however, keeping up with demand will be nigh impossible for at least the next few years until they beef up their physical infrastructure. “It’s not like Lilly and Novo will never be able to fulfill demand,” Jim Miller, a consultant to drug-making companies, told the FT, “It’s just that it can take three to five years to get a facility standing and running.” With the advent of anti-obesity drugs, no one should ever have to stand or run again.
Written by Isobel Asher Hamilton
CONSUMER
Temu Emerges as Major Ad Client for Meta, Google
The king of fast fashion is going through its advertising budget in a hurry.
China’s Temu is now one of the biggest clients for both Google and Meta, according to duelingreports published Thursday by The Wall Street Journal and The New York Times.
Supersonic Fashion
Temu, the international unit of Chinese e-commerce player Pinduoduo, turned heads during the NFL’s big game last month by purchasing four 30-second commercial spots, which reportedly cost about $7 million each this year, in which the company argued that purchasing its ultra-cheap products would make customers feel as if they “shop like a billionaire.”
But the Super Bowl spend was pocket change compared to what Temu spent to pop up on Google search results and Instagram feeds:
Last year, Temu placed roughly 1.4 million ads across Google’s various channels, the NYT reported. Meanwhile, the WSJ reports it was one of the company’s five biggest ad clients by total spend; sources also told the WSJ that Google ad sales reps have actively courted Temu’s business.
Temu ran as much as $2 billion worth of ads with Meta last year, sources told the WSJ (Temu disputed the figure, but declined to offer another number). The NYT reported that Temu ran as many as 26,000 different versions of ads on Meta platforms; Meta just reported over $13 billion in revenue from its China business, double the year prior and reversing a trend of declining revenue.
Spill the Temu: The ad blitz is likely paying off. Temu’s app is often the most downloaded on both Apple and Google’s respective app stores, according to Sensor Tower data. And while Pinduoduo doesn’t break out Temu’s financials, the company posted an overall profit of $2.1 billion in its most recent earnings report, a quarter that included nearly $3 billion in sales and marketing costs. But massive ad spending to sell $12 hoodies means the company is likely operating the division at a loss, at least in the US. Goldman Sachs estimated Temu averaged a $7 loss per order in 2023. They also may need to step up their PR and lobbying outlays after a Congressional report published last year found an “extremely high risk that Temu’s supply chains are contaminated with forced labor.”
Written by Brian Boyle
Extra Upside
Add it to the list: The National Transportation Safety Board is now also investigating a Boeing plane for “stuck rudder pedals,” report says.
(Not) All Things Must Pass: All of these stick-it-to-the-rich initiatives should excite Biden’s more progressive supporters, but they don’t stand much of a chance in Congress. 
