2019年11月20日 星期三

DealBook: How Democrats Would Tax High-Income Professionals

The primary race has created plenty of talk about levying billionaires. But leading Democratic proposals could also affect millions of well-paid workers.
November 20, 2019
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The New York City Stock Exchange building in Manhattan.
The New York City Stock Exchange building in Manhattan.  Gabby Jones for The New York Times
A new tax for top earners?
A lot has been written during the Democratic primary race about plans to tax billionaires.
But there’s also a tax increase in leading Democratic policy proposals that could affect millions of high-income workers, Neil Irwin of the Upshot writes:
• “This year, American workers and their employers owe a combined 12.4 percent on Social Security payroll taxes for income up to $132,900 (rising to $137,700 in 2020). They owe nothing on earnings above that level.”
• “Some Democrats in the thick of the presidential race and on Capitol Hill now seek to change or eliminate that cap — potentially placing a new double-digit tax on high earners, with several plans focusing on earnings above $250,000.”
“The result would be a large tax increase on high earners, even before other changes a Democratic administration might contemplate, such as increasing income tax rates or taxes on investment income,” Mr. Irwin adds. “The top earners facing new Social Security taxes would not see their future benefits rise commensurately; rather it would amount to a transfer from high earners to low- and middle-income Social Security recipients.”
The higher taxes would be paid disproportionately in Democratic-leaning states, according to Moody’s data. So the policy looks like “a test of what affluent liberals are willing to sacrifice to accomplish progressive goals,” Mr. Irwin notes.
Today’s DealBook Briefing was written by Andrew Ross Sorkin, Gregory Schmidt and Jamie Condliffe.
Protesters clashed with riot police officers in Hong Kong this week.
Protesters clashed with riot police officers in Hong Kong this week.  Lam Yik Fei for The New York Times
Support for Hong Kong protesters could hinder a U.S.-China trade deal
The Senate passed a bill yesterday aimed at protecting human rights in Hong Kong amid a crackdown on pro-democracy demonstrations in the territory. That puts pressure on President Trump to stand up to Beijing, Edward Wong reports in the NYT. And it comes just as the Trump administration is trying to find a resolution to the trade war with China.
The bill would require the government “to impose sanctions on Chinese and Hong Kong officials responsible for human rights abuses in the territory,” Mr. Wong writes. And it would “require the State Department to annually review the special autonomous status it grants Hong Kong in trade considerations.”
Bloomberg noted the challenge to the president presented by the bill:
• “China is likely to take offense and with that there will be negative effects for the ongoing trade war negotiations,” an analyst said. “The market won’t receive this well either.”
The measure has already drawn a rebuke from China, which reiterated a threat to impose unspecified retaliation if the bill becomes law.
Mr. Trump may have little room to maneuver. The Senate passed the bill by unanimous consent, as did the House last month with its version. The veto-proof backing means the measure could become law even if Mr. Trump tried to block it.
More: Hong Kong’s security chief urged protesters holed up at a university to surrender.
PG&E workers in Paradise, Calif., last month.
PG&E workers in Paradise, Calif., last month.  Rich Pedroncelli/Associated Press
PG&E is struggling to escape bankruptcy
The California utility is racing to reach a settlement with victims of wildfires and other creditors and to stave off calls for a state takeover, write Lauren Hepler, Peter Eavis and Ivan Penn in the NYT.
There could be repercussions if the company doesn’t reach an agreement by early next year:
• The utility might not be able to participate in a new state wildfire fund.
• A federal bankruptcy judge could strip control from its management and board or allow it to be broken up.
Tensions surfaced at a legislative hearing on Monday and in a bankruptcy hearing on Tuesday, when PG&E asked a judge to limit its liability for wildfires. “That hostility serves as a backdrop for a fierce battle over how much PG&E will pay wildfire victims, insurance companies, public agencies and other creditors,” the reporters write.
The utility’s pre-emptive blackouts amounted to “a big screw-you,” State Senator Bill Dodd said during the hearing on Monday, referring to the power cutoffs that were supposed to help guard against fires.
“They’ve failed us too many times,” another state senator, Mike McGuire, said.
A.I. could affect white-collar workers more than was thought
A new study by the Brookings Institution suggests that white-collar professions may be more exposed to the changes brought about by artificial intelligence than previously predicted.
The report compared job descriptions to the patent descriptions of new technologies. That represents a forecast of how future advances could change workplace duties.
It found that better-paid jobs may come under most pressure, as well as production workers. Some other findings:
• “Holders of bachelor’s degrees will be the most exposed by education level, more than five times as exposed to A.I. than workers with just a high school degree.”
• “A.I. will be a significant factor in the future work lives of relatively well-paid managers, supervisors, and analysts.”
• And business, technology and finance sectors will be particularly exposed.
This is a rare look at how A.I. alone could affect the work force, rather than analysis that also includes automation and robotics. And that goes a long way to explaining why white-collar careers — requiring skills like planning, learning, reasoning or prediction that A.I. is increasingly able to perform — could be more endangered than previously supposed.
The brands you like say a lot about your politics
Maybe you should be careful about which jeans you choose to wear: Many brands have become increasingly associated with Republicans or Democrats, Suzanne Kapner and Dante Chinni of the WSJ write.
“Democrats have become more likely to wear Levi’s than their Republican counterparts,” Ms. Kapner and Mr. Chinni write, citing consumer research data. “The opposite is true with Wrangler, which is now far more popular with Republicans.”
It’s not just jeans. Media brands like Fox and CNN have obviously become more strongly associated with political leanings, but according to other consumer data, so have sports (the N.B.A. is associated with Democrats), auto brands (GMC is associated with Republicans), alcohol (Moët & Chandon is associated with Democrats), and restaurants (Arby’s is associated with Republicans).
There is no simple explanation. “Some of it is due to social and political stances companies are taking,” the reporters write. But it’s also “tied to larger geographic shifts in the political parties themselves, as rural counties become more Republican and urban areas lean more Democratic.”
Gannett's headquarters in McLean, Va.
Gannett's headquarters in McLean, Va.  Valerie Plesch for The New York Times
America’s new largest newspaper chain has cuts to make
The merger of GateHouse Media and Gannett became final yesterday, creating the biggest newspaper publisher in the U.S. Now it’s time for some streamlining, Marc Tracy of the NYT writes.
The roughly $1.2 billion merger was struck with savings in mind. The deal was intended to give the combined companies annual reductions of some $300 million, Mr. Tracy reports.
Most of the cuts are “not going to come from editorial,” according to Michael Reed, the C.E.O. of GateHouse Media’s owner, New Media, who will run the new organization. “A significant portion of the cost reductions are going to come from things other than people,” he added.
• He has in mind savings of about 8 percent of annual costs. “So it’s not an overwhelming number — very achievable,” Mr. Reed said.
But “newspaper executives have sung this tune before, only to end up making aggressive cuts in an industry that has struggled,” Mr. Tracy writes. “Twenty-five percent of newsroom employees were laid off between 2008 and 2018, according to the Pew Research Center.”
Revolving door
Felix Scherzer, head of M.&.A. covering financial institutions at Credit Suisse, has quit the bank after nearly five years. He is leaving to start his own venture.
The speed read
• Alibaba priced its shares at 176 Hong Kong dollars, or about $22.50, in its Hong Kong listing, raising $12.9 billion. (Reuters)
• The banks advising Saudi Aramco on its I.P.O. will reportedly earn 0.35 percent of the money raised, which could mean they’re jointly paid as little as $90 million. It was said that they could have earned 0.5 percent if they’d hit Aramco’s target valuation of $2 trillion. (Reuters)
• The Fed approved a merger between BB&T and SunTrust Banks — the biggest tie-up of lenders since the 2007 financial crisis. (Reuters)
• The trade unions of PSA, Peugeot’s parent company, agreed to a merger with Fiat. (Reuters)
Trump impeachment investigation
• Two White House national security officials testified that President Trump’s request to Ukraine’s president to investigate Democratic rivals was inappropriate. (NYT)
• “The uniform I wear today is that of the United States Army,” Lt. Col. Alexander Vindman, one of the two officials, told the inquiry. “We do not serve any particular political party; we serve the nation.” (NYT)
• For a president who rarely spares the rhetorical howitzer, Mr. Trump’s attacks on White House aides this week represent a new level of bombardment. (NYT)
Politics and policy
• The prospects of the Trump administration striking a Middle East peace deal may be dimmer than ever. (NYT)
• A close look at the letters cited by the S.E.C. chairman, Jay Clayton, to support a policy change on shareholder voting shows that they were the product of a misleading public relations campaign by corporate interests. (Bloomberg)
British election
• Prime Minister Boris Johnson and Jeremy Corbyn, the leader of the opposition Labour Party, clashed over Brexit during a live TV debate last night. (NYT)
• Google has ended its biweekly all-hands meetings, a decision made just days after employees protested the interrogation of two colleagues by the company’s investigations team. (Wired, CNBC)
• What is end-to-end encryption? Another bull’s-eye on Big Tech’s back. (NYT)
• Thousands of Disney Plus accounts were hacked and credentials sold online for as little as $3 each. (WaPo)
• The primary cause of a fatal crash involving a self-driving Uber in March 2018 was the safety driver’s failure to monitor the road, the National Transportation Safety Board determined. (FT)
Best of the rest
• A judge said that Elon Musk must stand trial as part of a defamation lawsuit brought by a British cave explorer whom Mr. Musk described on Twitter as a “pedo guy.” (NYT)
• Juul is being sued by two more states — New York and California — over its vaping ads. (NYT)
• The Australian bank Westpac was accused by the national financial crime watchdog of failing to report 23 million suspicious transactions worth $7.5 billion. (FT)
• Two jail employees who were guarding Jeffrey Epstein on the night of his death were accused of napping and shopping online during their shift and were charged with falsifying records and conspiring to defraud the U.S. (NYT)
• Boeing has been urged to redesign the engine cover of a 737 aircraft model, the 737NG, after a fatal accident last year in which the plane was implicated. Also: The company has secured more deals for the grounded 737 Max. (FT, WSJ)
• Here’s how a gig worker revolt begins. (NYT)
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