A tax fight with big stakes
Oral arguments in the high-stakes tax case are set to begin in the Supreme Court on Tuesday.
Moore v. United States may appear in a center A $14,729 tax refund request, tied to a law that affected relatively few Americans. But it could redefine what’s considered income in America, change how Congress taxes it and block future efforts by Democrats to tax billionaires’ wealth.
Back story: In 2018, the Trump administration and Congress changed how American companies’ foreign profits were taxed through a one-time tax on income from foreign subsidiaries. (Earlier, duty was due only on profits that were brought back to the US)
But Charles and Kathleen Moore, a couple from Washington state, sued over $14,729 they were assessed under the new law from their stake in an Indian company. The couple argued that they did not have to pay tax because they were sitting on unrealized gains and not actual dividends. The case was dismissed at the district and appellate court levels, but – backed by conservative groups – made it to the Supreme Court.
The case will depend on when the income can be taxed. Lower courts ruled that income need not be realized to be taxable, citing language in the 16th Amendment that gives Congress the power to “impose taxes on income, from whatever source derived.”
What’s tricky is that many federal taxes are assessed on unrealized income, which applies to futures contracts and many partnerships. a bill Introduce President Biden’s version of the wealth tax Based on the concept of taxation on unrealized gains. “Judges can rule that taxes should only be paid by working people who receive a paycheck, and not by the wealthy,” Maurice Pearl, chair of the advocacy group Patriotic Millionaires, told DealBook.
Political battle lines have been broken through the lawsuit. Progressive groups have filed briefs in support of the Biden administration. But some conservative groups also fear that the high court’s conservative majority could overwhelmingly reject the idea of taxing unrealized income. Paul Ryan, the former House speaker who helped write the 2018 legislation in question, speculated that Up to a third of the US tax code May be a fire hazard.
Is there a way to thread the needle? Some experts, viz Tax Law Center at New York University School of Law, urges justices to decide only on the specific issue at hand whether a company’s shareholders should be liable for income generated at the corporate level. (In this case, the Tax Law Center argues, the answer is yes.)
Others think more legal challenges to the tax code are inevitable: “This is the beginning of the story, not the end,” David Rosenbloom, a partner at the law firm Caplin & Drysdale, told the Wall Street Journal.
what’s going on here
Moody’s downgrades China’s credit rating outlook to negative. Rating agency Dr It was concerned about the potential cost of bailing out heavily indebted regional and local governments and state-owned businesses, adding that it expected lower economic growth as the heavily indebted property sector shrank. China’s national government has retained its A1 credit rating, but the move signals eroding confidence in the country’s finances.
Israel launched an attack on southern Gaza. Israeli troops entered A potential showdown is set up in Khan Yunis, the last part of Hamas-controlled territory, where the organization’s leadership is believed to have regrouped.
Vladimir Putin will visit Saudi Arabia and United Arab Emirates. journey It marks a rare foreign visit by a Russian president since the invasion of Ukraine last year and is likely to include talks. Further decline in oil production. Separately, the White House warned Congress US aid to Ukraine It could end by the end of the year unless lawmakers approve billions more in foreign aid.
Qatar’s sovereign wealth fund is set to sell about half its stake in Barclays. Gulf countries want 361.7 million shares offloaded At the British bank, a move is expected to raise $644 million, according to Bloomberg. It would mark Qatar’s biggest pullback from Barclays since the lender invested in 2008 to help the bank avoid a government bailout during the global financial crisis.
Big Oil’s Big COP28 Presence
Big Oil was almost certain to play a major role in this year’s COP28 climate conference in Dubai, especially the 2023 climate conference. Warmest year on record. But the role of Emirati oil executives hosting the event and the number of industry lobbyists in attendance — as well as reports on global emissions from fossil fuels — show. getting up — brought tension to the head.
More than 2,400 industry lobbyists registered for the UN eventHeld in the United Arab Emirates. This represents a nearly fourfold increase from last year’s COP in Egypt, according to the watchdog group Kick Big Polluters Out.
Climate activists and scientists are concerned about Big Oil’s outsized presence. World leaders gathered in Dubai to assess progress on limiting the rise in planetary warming to no more than 2 degrees Celsius. Climate scientists have been warning for years that the world needs to dramatically reduce fossil fuels to prevent a climate crisis.
Such cuts have always been difficult for oil exporting giants to agree to. Saudi Arabia Dr It will not sign off Any text for phasing out fossil fuels.
Sensitivities around fossil fuels have increased pressure on Sultan Al Jaber, the event’s president who runs Abu Dhabi’s national oil company Adnoc. It came to light over the weekend that he had questioned the need to phase out fossil fuels ahead of the summit, sparking an uproar. “It was only a matter of time before the reality of the most blatant conflict of interest in the history of climate negotiations was no longer hidden.” Al Gore saidFormer Vice President.
In a hastily arranged press conference on Monday, Al Jaber said his comments were taken out of context.
More COP28 news:
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Billionaire hedge fund manager Ray Dalio echoed Bill Gates’ comments about achieving a 2°C limit on warming. a long shot. He also warns that high interest rates will stifle climate investment.
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The Biden administration $3 billion commitment It is expected to be shot down by Congress to help vulnerable countries deal with the ravages of climate change.
How ChatGPT has upended the tech industry
When OpenAI released ChatGPT a year ago in November, few could have predicted how it would radically change the tech industry.
Instead, the artificial intelligence industry exploded, drawing Silicon Valley into the race to profit from the technology. The Times describes what the year of AI has been like Transformed Big Tech.
Google has reinvented itself. The CEO Sundar Pichai was initially unimpressed with ChatGPT, given how wrong it was. But OpenAI released the chatbot anyway, and the public loved it — and he thought Google might release products that aren’t perfect. It launched a reshuffle, which merged the tech giant’s two AI units, Google Brain and DeepMind, and fast-tracked development.
Meta pivoted, again. Facebook parent company Mark Zuckerberg was obsessed with the Metaverse. But Ian LeCun, its top AI scientist and pioneer of the technology, warned that AI-powered assistants could make Meta platforms obsolete. (LeCun also urged the company to adopt an open-source approach that allows anyone to tinker with product code, unlike the traditional approach followed by OpenAI and Google.) “I think you’re right,” Zuckerberg said, and Hundreds of employees have been ordered to be reassigned to AI
Microsoft doubled down on its bet. The CEO Satya Nadella invested in OpenAI early on before much of Silicon Valley recognized its potential. After being overwhelmed by the power of GPT-4, a more powerful version of ChatGPT’s core technology, Nadella abandoned his usual consensus-driven approach and asked lieutenants to embrace AI. Must have,” one executive remembers him saying.
But a top voice at Google bowed. Geoffrey Hinton, a leading AI researcher who has trained dozens of other experts — including OpenAI chief scientist Ilya Sutskever — has long been skeptical of pessimists’ doomsday scenarios. Yet the rise of increasingly capable chatbots has changed his mind. And the emerging arms race among tech giants to commercialize the technology, despite the risks, prompted Hinton to leave the company.
What is driving the bitcoin rally
Bitcoin bulls have been brushed off A massive legal crackdown Some of the industry’s biggest players pushed the value of the digital currency to near 20-month highs this week, against concerns of higher interest rates and a global recession.
The digital currency traded at around $41,700 on Tuesday, after pushing $42,000 last Monday. It has gained nearly 150 percent this year, outperforming the Nasdaq Composite Index, as investors bet that regulators will soon approve the first spot bitcoin exchange-traded fund, or ETF.
Investment management experts are flocking. Thirteen companiesBlackRock, along with Fidelity and Swiss-based Pando Asset, have now filed paperwork with the SEC to create such an ETF, Reuters reported. Report.
Unlike existing bitcoin ETFs, which are tied to futures contracts, a spot fund allows investors to own tokens without the hassle of requiring a crypto wallet. Regulatory approval for such a product would usher in a long-held dream of a mainstream investment product industry.
The SEC was silent on when such approval might come. Despite the flurry of funding filings. Still, investors have increased their bets on bitcoin in recent weeks, amid speculation that the company will Decision by January.
It should be noted that trading in crypto is exceptionally volatile due to the relatively small market for digital currencies. Breathless anticipation for a spot ETF has created the conditions for a Rally based on FOMO — that is, fear of missing out — according to crypto investment services firm Matrixport.
Speed Read
Deal
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Mistral, a nearly year-old French AI start-up that raised $113 million this summer, is reportedly finalizing another investment round that values it About $2 billion. (Bloomberg)
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Richard Branson, the billionaire founder of the space tourism company, said he had lost shares in Virgin Galactic on Monday. Don’t invest anymore in Business (CNBC)
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The justice department is scheduled for closing arguments in the case on Tuesday Block JetBlue’s takeover of Spirit Airlines. (wapo)
Policy
The rest is the best
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A prominent disinformation scholar, Joan Donovan, accused Harvard Pushing her to please Meta After the university received a $500 million pledge from Mark Zuckerberg and Priscilla Chan’s charity. (wapo)
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“who have become very rich And who didn’t during the pandemic” (WSJ).
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legacy, by number, Sandra Day O’Connor, a Supreme Court justice who died last week. (Empirical SCOTUS)
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