The daily business briefing: March 28, 2022
Biden prepares to unveil "Billionaire Minimum Income Tax," China's biggest city imposes a two-stage COVID-19 lockdown, and more
Biden set to release proposal for 'Billionaire Minimum Income Tax'
President Biden on Monday is expected to unveil a proposal to impose a minimum 20 percent tax on the wealthiest 0.01 percent of Americans. The "Billionaire Minimum Income Tax," which would affect about 700 households with a net worth of more than $100 million, would reduce projected federal budget deficits by more than $1 trillion over a decade. Half of the revenue from the tax would come from billionaires, many of whom pay low tax rates because they are not taxed on "unrealized gains," such as increases in the value of their stock holdings. The document explains that, under Biden's proposal, if a household's tax bill falls short of 20 percent of "full income" (including unrealized gains), "they will owe a top-up payment to meet the 20 percent minimum."
China's biggest city imposes its 1st coronavirus lockdown
The government of China's biggest city, Shanghai, announced Sunday night that it was imposing staggered lockdowns and mandatory coronavirus testing to help contain the latest COVID-19 outbreak. Local officials will start putting the policies into place on Monday. Shanghai, a global financial hub with a population of 26 million, had just a handful of new cases daily in early March, but new infections spiked to more than 2,600 on Sunday. Under the restriction taking effect Monday, only citizens providing essential and public services will be allowed to leave their residences in half of the city for the next five days, and in the other half for the five days after that. Shanghai avoided full citywide lockdowns earlier in the pandemic.
FDA to authorize second boosters for people 50 and older
The Food and Drug Administration is expected this week to authorize a second boosters of the Pfizer-BioNTech and Moderna coronavirus vaccines for people aged 50 and older, The Washington Post reported Sunday, citing several government officials. The decision comes as the United States braces for a rise in COVID-19 cases from a fast-spreading Omicron sub-variant that has fueled a surge in Europe. The officials said the announcement could come as soon as Tuesday, and that the policy could still change. The director of the Centers for Disease Control and Prevention, Dr. Rochelle Walensky, is expected to promptly sign off on the FDA decision.
Stock futures flat ahead of key economic data
U.S. stock futures were little changed early Monday ahead of a big week of fresh economic data. Futures tied to the Dow Jones Industrial Average were essentially flat at 6:45 a.m. ET, while those of the S&P 500 and the tech-heavy Nasdaq were down by 0.1 percent and 0.2 percent, respectively. The Dow and the S&P 500 both ended higher on Friday to close their second straight week of gains. Investors are continuing to monitor Russia's invasion of Ukraine, and the Federal Reserve's plans to fight high inflation by raising interest rates. Tesla shares jumped 4.8 percent in pre-market trading to $1,059.00 after the electric-car maker said it planned to split its stock so it can pay shareholders a dividend.
Oil prices drop as Shanghai lockdown raises fears of weak demand
Oil prices fell by more than $5 per barrel on Monday as Shanghai's two-stage coronavirus lockdown stoked concerns of weakening demand for fuel. International benchmark Brent crude dropped by as much as $5.15, or 4.3 percent, to $115.32 a barrel, while U.S. benchmark West Texas Intermediate fell $5.30, or 4.7 percent, to $108.28 per barrel. Both benchmarks have gone through a period of volatility since Russia invaded Ukraine on Feb. 24, soaring to more than $130 a barrel, then dropping below $100 before rising again. Last week, both benchmarks rose for the first time in three weeks, with Brent jumping by 11.8 percent and WTI rising 8.8 percent.