Morning Consult Finance: In State of the Union, Biden to Push for Billionaire Tax, Larger Tax on Stock Buybacks


Essential financial news & intel to start your day.
February 7, 2023
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Today’s Top News

  • In a preview of his State of the Union address, President Joe Biden indicated that he would renew calls for a minimum tax on billionaires and call for a quadrupling of taxes on corporate stock buybacks, proposals that are not likely to garner much support from congressional lawmakers. A 1% stock buyback tax passed as part of the Inflation Reduction Act, but it has been seen as too low of a rate to successfully deter companies from buying back their own shares, thwarting Democrats’ hopes of spurring corporations to use funds in other ways that would stimulate the economy. (Bloomberg)
  • House Speaker Kevin McCarthy (D-Calif.) reiterated calls for Republicans to push for spending cuts while negotiating the federal debt ceiling, and while he repeated past statements that Social Security and Medicare should not be used as bargaining chips, he did not give a timeline for when the party thinks the country should achieve a balanced budget. (The Wall Street Journal) Rep. Don Bacon (R-Neb.) said that a procedural move in the House that could sidestep McCarthy and secure a vote to raise the debt ceiling without negotiation is likely dead on arrival, as the plan would require at least six Republican House members, and all Democrats, as signatories. (NBC News)
  • Crypto exchange Binance said it will suspend U.S. dollar deposits and withdrawals for a period of time beginning tomorrow, but did not give a reason for the pause. Binance said the pause does not affect customers of Binance US, and only applies to non-U.S. customers who transfer money to or from bank accounts in dollars, which represents about 0.01% of the exchange’s monthly active users. (CNBC)
  • Apollo Global Management is among the firms in talks to acquire a stake in Credit Suisse Group AG’s newly rebranded investment banking advisory unit, CS First Boston, according to people familiar with the matter. Talks with Apollo are continuing, and the size of the potential deal is unknown. (The Wall Street Journal)

Worth watching:

  • President Joe Biden delivers his State of the Union Address at 9 p.m.
  • Federal Reserve Chair Jerome Powell will be interviewed by Carlyle Group co-Executive Chairman David Rubenstein at The Economic Club of Washington, D.C.
  • Fed Vice Chair for Supervision Michael Barr will give keynote remarks at the Banking on Financial Inclusion Hope Economic Mobility Forum.

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What Else You Need to Know


Florida Lawmakers Move to Take Over Disney’s Special-Tax District

Robbie Whelan, The Wall Street Journal

If approved, the bill would give Gov. Ron DeSantis the power to appoint members to oversee the district, instead of eliminating it, as the governor had pledged.


Biden’s 2022 State of the Union report card: Where he delivered — and fell flat

Myah Ward, Politico

Promises, promises. President Joe Biden’s State of the Union address last year was loaded with them: from Ukraine to infrastructure, to immigration and reproductive rights.


Black small-business owners more confident about this year than their peers

Hope King, Axios

Black small-business owners feel more optimistic about this year than their peers, Goldman Sachs’ latest 10,000 Small Businesses Voices survey shows.


35% of millionaires say retirement is ‘going to take a miracle,’ report finds

Jessica Dickler, CNBC

These days, fewer Americans — including millionaires — feel confident about their financial standing.

Economic and Fiscal Policy

Yellen: ‘You don’t have a recession’ when U.S. unemployment at 53-year low

Andrea Shalal, Reuters

U.S. Treasury Secretary Janet Yellen on Monday said she saw a path for avoiding a U.S. recession, with inflation coming down significantly and the economy remaining strong, given the strength of the U.S. labor market.


Fed’s Bostic Says Higher Peak Rate on Table After Jobs Blowout

Steve Matthews, Bloomberg

Federal Reserve Bank of Atlanta President Raphael Bostic said January’s strong jobs report raises the possibility that the central bank will need to increase interest rates to a higher peak than policymakers had previously expected.


Failure to raise U.S. debt ceiling would lead to ‘economic and financial catastrophe,’ Yellen says

Chelsea Cox, CNBC

The U.S. government risks “economic and financial catastrophe” if the House fails to pass a bill to raise the $31.4 trillion debt ceiling, Treasury Secretary Janet Yellen said Monday.


Child Care Hasn’t Recovered From Covid, Keeping Many Parents at Home

Harriet Torry, The Wall Street Journal

The high cost and limited availability of child care is keeping some parents out of the labor force when unemployment is at its lowest rate in more than half a century. There were about 58,000 fewer daycare workers in the U.S. last month compared with February 2020, just before the pandemic took hold, according to the Labor Department, even though the broader labor market has recovered all lost jobs.


US states offer their own green subsidies in bid to lure investment

Amanda Chu and Derek Brower, Financial Times

Inflation Reduction Act committing $370bn to clean energy ‘switched on a lightbulb’ for local officials


Businesses face worldwide push for more tax disclosure

Brian Faler, Politico Pro

Governments across the developed world are pushing to raise taxes on big corporations, but that’s not all they want.


State stimulus checks: IRS plans to rule whether these payments are taxable this week

Rebecca Chen, Yahoo Finance

The Internal Revenue Service is expected to provide more guidance this week on whether stimulus checks that states issued in 2022 are considered taxable income on federal returns.


Side Hustles Are Twice as Common as US Jobs Data Suggest, Survey Finds

Alexandre Tanzi, Bloomberg

Side hustles are twice as prevalent as government data suggests, indicating that more Americans need to work multiple jobs to make ends meet amid historically high inflation.


Bank of America’s Moynihan says firm is preparing for US debt default

Julia Mueller, The Hill

Bank of America CEO Brian Moynihan on Monday said the firm is preparing for the U.S. to default on its debt after surpassing its borrowing limit last month.

Financial Products and Investments

Robinhood Hits Back at SEC, Warns of Threat to Zero-Commission Trading

Alexander Osipovich, The Wall Street Journal

Regulator’s proposals would crimp payment for order flow, a key source of the brokerage’s revenue.


Many on Wall St. Turned Down Carlyle Before It Hired Its C.E.O.

Maureen Farrell, The New York Times

In November, Bill Conway, then interim chief executive of Carlyle, the investing behemoth he helped to start in 1987, walked around the firm’s Manhattan headquarters asking younger employees: “Would you like to take my job?”


New Carlyle CEO Schwartz Gets Shot at $180 Million Incentive
Dawn Lim, Bloomberg

Carlyle Group Inc. said it plans to give incoming Chief Executive Officer Harvey Schwartz a five-year stock incentive package valued at $180 million — if he can lift the firm’s sagging share price.


Carlyle fundraising slowed sharply during chief executive hunt

Antoine Gara, Financial Times

Slowdown underlines pressure on Harvey Schwartz after he was appointed to the top job this week


NYSE Plans to Pay in Full Majority of Claims After Glitch

Katherine Doherty, Bloomberg

Investors burned by last month’s malfunction on the New York Stock Exchange can recoup all of their losses, but only if their trades fit certain parameters. The rest may wind up with nothing.


Oklahoma joins in ESG backlash, creating its own boycott list

Margarida Correia, Pensions & Investments

Oklahoma State Treasurer Todd Russ announced Feb. 1 that he had started the process of compiling a list of financial institutions with which Oklahoma government entities will be prohibited from doing business because of their environmental, social and governance policies.


Credit Suisse markets CSFB as ‘super boutique’, sees revenue rebound

Paritosh Bansal, Reuters

Credit Suisse Group AG is marketing its First Boston investment banking unit to investors as a “super boutique” and sees revenue surging to as much as $3.5 billion, as the embattled lender seeks to raise funds for the revamped business, a company document seen by Reuters shows.


India’s Adani still eligible to be part of influential JPMorgan bond indexes


India’s Adani group of companies, which in recent weeks has seen a brutal selloff in its bonds and shares after being targeted by a U.S. short-seller, is still eligible for inclusion in JPMorgan’s influential bond indexes, the bank said in a note.


Goldman Sachs to invest over $1 bln in Europe biomethane venture

Virginia Furness, Reuters

Goldman Sachs Asset Management said on Monday it had launched a biomethane business called Verdalia Bioenergy and aimed to invest more than 1 billion euros ($1.08 billion) in Europe over the next four years.

Housing and GSEs

Home-Buying Companies Stuck With Hundreds of Houses as Demand Slows

Will Parker and Nicole Friedman, The Wall Street Journal

Ribbon Home Inc. had a fast-growing business during the housing boom. The New York City-based startup purchased homes with cash on behalf of buyers. Then it sold the homes to the buyers at the same price, plus a fee, once the buyers got a mortgage.


The remote workers have left, but the housing havoc they created remains

Shannon Pettypiece, NBC News

The throngs of remote workers who flocked to rural communities throughout the pandemic have begun to thin as employers push a return to offices. But for many of the towns remote workers descended on, the housing crisis they fueled has remained.

Crypto and Financial Technology

Genesis creditors to expect 80% recovery under proposed restructuring plan

Jesse Coghlan, Cointelegraph

Digital Currency Group (DCG) plans to hand its equity stake in Genesis’ trading arm to Genesis Global, which will then be sold, pending court approval.


Sam Bankman-Fried Settles Bail Dispute With US Over Encrypted Apps

Ava Benny-Morrison, Bloomberg

Sam Bankman-Fried has settled a dispute with federal prosecutors over his use of encrypted messaging apps and communications with former FTX employees while he is out on bail.

Morning Consult