Warren’s Taxes Could Add Up to More Than 100%
The Wall Street Journal’s Richard Rubin says Elizabeth Warren’s proposed taxes could claim more than 100% of income for some wealthy investors. Here’s an example Rubin discussed Friday:
“Consider a billionaire with a $1,000 investment who earns a 6% return, or $60, received as a capital gain, dividend or interest. If all of Ms. Warren’s taxes are implemented, he could owe 58.2% of that, or $35 in federal tax. Plus, his entire investment would incur a 6% wealth tax, i.e., at least $60. The result: taxes as high as $95 on income of $60 for a combined tax rate of 158%.”
In Rubin’s back-of-the-envelope analysis, an investor worth $2 billion would need to achieve a return of more than 10% in order to see any net gain after taxes. Rubin notes that actual tax bills would likely vary considerably depending on things like location, rates of return, and as-yet-undefined policy details. But tax rates exceeding 100% would not be unusual, especially for billionaires.
Number of the Day: $30 Billion
The amount spent on medical marketing reached $30 billion in 2016, up from $18 billion in 1997, according to a new analysis published in the Journal of the American Medical Association and highlighted by the Associated Press. The number of advertisements for prescription drugs appearing on television, newspapers, websites and elsewhere totaled 5 million in one year, accounting for $6 billion in marketing spending. Direct-to-consumer marketing grew the fastest, rising from $2 billion, or 12 percent of total marketing, to nearly $10 billion, or a third of spending. “Marketing drives more treatments, more testing” that patients don’t always need, Dr. Steven Woloshin, a Dartmouth College health policy expert and co-author of the study, told the AP.
70% of Registered Voters Want a Compromise to End the Shutdown
An overwhelming majority of registered voters say they want the president and Congress to “compromise to avoid prolonging the government shutdown” in a new The Hill-HarrisX poll. Seven in ten respondents said they preferred the parties reach some sort of deal to end the standoff, while 30 percent said it was more important to stick to principles, even if it means keeping parts of the government shutdown. Voters who “strongly approve” of Trump (a slim 21 percent of respondents) favored him sticking to his principles over the wall by a narrow 54 percent-46 percent margin. Voters who “somewhat approve” of the president favored a compromise solution by a 70-30 margin. Among Republicans overall, 61 percent said they wanted a compromise.
The survey of 1,000 registered voters was conducted January 5 and 6 and has a margin of error of 3.1 percentage points.
Share Buybacks Soar to Record $1 Trillion
Although there may be plenty of things in the GOP tax bill to complain about, critics can’t say it didn’t work – at least as far as stock buybacks go. TrimTabs Investment Research said Monday that U.S. companies have now announced $1 trillion in share buybacks in 2018, surpassing the record of $781 billion set in 2015. "It's no coincidence," said TrimTabs' David Santschi. "A lot of the buybacks are because of the tax law. Companies have more cash to pump up the stock price."
Chart of the Day: Deficits Rising
Budget deficits normally rise during recessions and fall when the economy is growing, but that’s not the case today. Deficits are rising sharply despite robust economic growth, increasing from $666 billion in 2017 to an estimated $970 billion in 2019, with $1 trillion annual deficits expected for years after that.
As the deficit hawks at the Committee for a Responsible Federal Budget point out in a blog post Thursday, “the deficit has never been this high when the economy was this strong … And never in modern U.S. history have deficits been so high outside of a war or recession (or their aftermath).” The chart above shows just how unusual the current deficit path is when measured as a percentage of GDP.
4.2 Million Uninsured People Could Get Free Obamacare Plans
About 4.2 million uninsured people could sign up for a bronze-level Obamacare health plan and pay nothing for it after tax credits are applied, the Kaiser Family Foundation said Tuesday. That means that 27 percent of the country’s 15.9 million uninsured people could get covered for free. The chart below breaks down the eligible population by state.
