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Vice President Kamala Harris has endorsed a tax proposal that is lighting up debates everywhere. The 25% minimum tax on total income, including unrealized capital gains, targets the ultrawealthy, particularly those with over $100 million fortunes. While some see this as a bold move toward fairness, many financial experts and political voices are raising alarm bells.

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Jason Katz, managing director and senior portfolio manager at UBS, is among the most outspoken critics. In an interview with Fox Business, Katz didn’t mince words, calling the proposal “an unmitigated disaster.”

According to him, taxing unrealized gains – that is, gains on assets that haven’t been sold yet – would create an “accounting nightmare.” He painted a grim picture of taxpayers facing massive bills for gains that could easily disappear the following year.

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Katz illustrated his point with a hypothetical scenario, asking, “If you have an ultra high net worth person who bought, say, $100 million worth of Amazon and it goes to $150 million and the government taxes 23% on that $50 million in year one, if in year two, that $150 – because Amazon drops – goes back to $100 million, is the government going to rebate the tax from the previous year?”

“It would be an accounting nightmare, not to mention the fact it would suck money out of the capital markets,” he said. He added that it ‘made no sense’ applying the tax to other asset classes like real estate, where investors also see unrealized gains.

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While Katz and other critics warn of potential market disruptions, the Biden administration defends the proposal as a necessary step to close loopholes that allow the wealthiest Americans to avoid paying their fair share.

An entrepreneur and “Shark Tank” investor, Mark Cuban offered a somewhat different perspective. According to CNBC’s Squawk Box, the billionaire entrepreneur and “Shark Tank” star claims to have spoken with Harris’ team directly.

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He said Harris’ aide told him that unrealized capital gains wouldn’t be taxed, which contradicts what has been circulating about the proposal. Even within Harris’ camp, there’s a bit of a disconnect on what the plan entails.

However, tax proponents, such as Democratic Sen. Elizabeth Warren, argue that taxing unrealized capital gains could help close the wealth gap by ensuring that the ultrawealthy pay their fair share. According to a report from The New York Times, wealth inequality in the U.S. has reached levels not seen since the 1920s.

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From an economic perspective, critics, including former CKE Restaurants CEO Andy Puzder, have called the proposal “voodoo economics.” Speaking on Fox Business’s ‘Evening Edit,’ he said, “The idea that we’re going to tax unrealized capital gains, that’s just absurd. This is voodoo economics … it’s absolutely ridiculous.”.

There are also logistical hurdles to consider. Analysts have pointed out that taxing unrealized gains would likely require new reporting systems and create huge compliance headaches for taxpayers and the IRS.

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This article This Market Pro Says Kamala Harris’ Unrealized Capital Gains Tax ‘Makes No Sense’ And Will ‘Suck Money Out Of The Market’ originally appeared on Benzinga.com

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• Saudi Arabia could flood the market with oil to regain control of prices.

• This would create a difficult situation for Russia, which is reliant on higher crude prices.

• One analyst suggests the market could see a repeat of the 2020 oil price war.

Russia’s wartime economy could face a tougher time securing needed oil revenue if Saudi Arabia tanks global crude prices.

The kingdom has reportedly signaled that crude could drop as low as $50 a barrel if the Organization of Petroleum Exporting Countries does not commit to reducing oil output.

In other words, Riyadh is hinting that it could flood the market with oil supply, analysts say. The move would slash prices and penalize OPEC members who have not cooperated in reducing oil flows — including Russia.

“With Russia already selling its oil at discounted rates and with higher production costs, a low-price environment in oil markets may impact its ability to finance its aggression in Ukraine,” Luke Cooper, a research fellow at the London School of Economics, wrote for the IPS Journal.

Saudi Arabia, the de facto leader of OPEC, has been trying to keep oil above $100 per barrel by pushing for member states to cut production.

But with international crude hovering below the $80 mark, this hasn’t worked. To shift strategy sources told the Financial Times that Riyadh now plans to turn on its taps by December.

“Saudi Arabia is fed up,” Simon Henderson, director of the Bernstein Program on Gulf and Energy Policy at The Washington Institute, told Business Insider. “Leadership of OPEC is a multifaceted responsibility. It can work well, but it’s also like herding cats — pretty damn impossible, at least some of the time.”

S&P Global Ratings data counts Russia among the overproducers in OPEC+. According to its last available data, Moscow produced 122,000 barrels above its daily quota in July. Iran and Kazakhstan also breached agreed-upon thresholds.

The Kremlin’s dilemma

Henderson suggested that some coalition members might be doing this to maximize profits.

In Russia’s case, Moscow is facing pressure to rake in as much as it can, as its war in Ukraine has ballooned defense and security spending in three years of war. These sectors will collectively account for 40% of all federal expenditures in Russia next year.

Russia’s finances, meanwhile, are heavily dependent on oil revenue. A few years ago, gas and oil production made up 35%-40% of the nation’s budget revenue, the country’s finance minister said this week.

It’s for this reason that the West has been so focused on curbing Russian oil profits. Consider the Group of Seven’s $60 price cap on Moscow’s crude: though the two-year initiative has not panned out as hoped, it was considered to be a key to keeping oil supply stable while denying the Kremlin much needed revenue.

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Russia has been able to circumvent these caps using unregistered “shadow” tankers, but Riyadh’s $50 per barrel threat might be harder to overcome.

Things could turn sour if Saudia Arabia’s supply dump reignites an oil price war between Russia and the kingdom. Henderson suggested this could happen, referring to a similar event that occurred in 2020.

That year, production cut disagreements prompted both nations to unleash supply, testing who could survive this low-price environment longer.

In these situations, foreign exchange reserves become essential, which is problematic for Russia.

Since invading Ukraine, the country’s insurance against low oil prices has dissipated. Russia’s National Wealth fund was nearly halved at the start of this year, and it is no longer able to source Western currencies to diversify its foreign exchange reserves.

It remains to be seen whether President Vladimir Putin will want to engage in a price war with Riyadh, given his other, more immediate priorities, Henderson said.

Predicting the Kremlin’s moves is hard, he said, given many unknowns tied to Russia’s oil sales.

However, some kind of confrontation with Saudi Arabia may be stirring. This week, Russia’s deputy prime minister Alexander Novak said it’s unclear whether OPEC should increase oil output at its December meeting, as signaled by Saudi Arabia.

If things do take a turn for the worst, Cooper sees a potential price war as bad news for Russia.

“Unlike Saudi Arabia, its oil is not cheap to extract, making it poorly equipped to deal with low-price conditions. This drives a short-term escalatory logic for Russia’s war on Ukraine, requiring rapid battlefield successes prior to the emergence of low-price oil market conditions.”

Read the original article on Business Insider

Housing demand has been hard to forecast even as mortgage rates have declined. Just take a look at homebuilders’ quarterly results so far this earnings season.

Two of America’s largest homebuilders, Lennar (LEN) and KB Home (KBH), reported third quarter net new home orders that have fallen short of Wall Street expectations.

Net new orders represent the number of new sales contracts that have been finalized and signed by buyers minus customer home order cancellations booked for the period. Investors and analysts pay close attention to this figure because its a leading indicator for homebuilders on housing activity.

Lennar, the nation’s second-largest homebuilder, said last month that its net new orders for the quarterly period ending Aug. 31 rose 4.7% from the prior year to 20,587. That fell short of analysts’ forecasts of 20,827 orders, per Bloomberg data.

Homebuilder KB Home also reported in September that net orders for the period ending Aug. 31 were a disappointment. The builder said orders fell 0.4% from the prior year to 3,085, lower than analysts’ estimates of 3,345 orders.

Part of the reason for the misses is that it’s been hard to determine how much recent mortgage rate movements would affect buyer demand. Mortgage rates have stayed stuck between 6% and 7% this year. And in June, rates were toggling just above or below 7%.

Read more: When will mortgage rates go down? A look at 2024 and 2025.

“Maybe shame on us for not modeling it more clearly, but June and July were clearly challenging months,” John Lovallo, senior equity research analyst at UBS, told Yahoo Finance in an interview.

From a buyer’s perspective, “there was uncertainty about where rates were going. There was uncertainty about where the economy and the Fed were going, and there was growing uncertainty about the election,” Lovallo added.

The uncertainty doesn’t appear to be going away despite the Federal Reserve’s jumbo interest rate cut in September. Mortgage rates had already been on the decline as investors had bet on a rate reduction ahead.

It’s unclear how much they’ll fall. Data from Freddie Mac shows the average 30-year fixed mortgage rate jumped by 20 basis points to 6.32% last week. This marks the biggest week-over-week increase since April.

Read more: Is this a good time to buy a house?

Goldman Sachs revised its year-end forecasts in early October for 30-year conforming mortgage rates, lowering them to 6% for this year and 6.05% for 2025, down from the previous estimates of 6.5% and 6.1%.

The firm’s strategists said in the note that there’s “limited room” for major declines. They think “the decline in mortgage rates has largely run its course.”

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Lovallo warned that it’s highly likely that the other homebuilders will report misses on Q3 net orders due to rate volatility this summer. More builders are gearing up to report quarterly earnings in the next few weeks with PulteGroup (PHM) and NVR (NVR) reporting on Oct. 22 and DR Horton (DHI) on Oct. 29.

Dani Romero is a reporter for Yahoo Finance. Follow her on X @daniromerotv.

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Driving solutions in a period of unprecedented change in today’s combat zones

Meet Our Global Team at Booth 2407

TYSONS CORNER, Va., Oct. 13, 2024 /PRNewswire/ — One year after relocating its headquarters from Europe to the Washington D.C. area and changing its name to Integris Composites, the business founded 30 years ago returns tomorrow to AUSA 2024 with a global team of experts and product innovations to help protect warfighters in a period of unprecedented change and complexity.

Founded in 1994 as ARES, and later established as TenCate Advanced Armor until the name was changed last year, Integris Composites is exhibiting at AUSA, Oct. 14-16, in Booth 2407.

“We are displaying an expanding portfolio of ballistic, blast and spall limiting technology for land, sea and air operations. We’re also inviting visitors to discuss emerging challenges with our experts from around the world,” said David Cordova, chief commercial officer, Integris Composites, Inc. Engineers and armor designers from the global organization will be on hand to speak with guests.

Global Challenges & Multinational Resources

“In addition to personal protection and tactical vehicles, our team can share solutions being developed for watercraft and aircraft globally. We can also discuss the rapidly changing threats in combat,” Cordova said.

“For example, we are all aware that militias spawned by terrorists are fielding low-cost explosives and drones that are creating unique challenges for Western allies,” Cordova added.

“At Integris, we are exploring innovative defenses against advanced threats, including top-attack weapons, kamikaze drones, loitering munitions, and smart submunitions. These are just some of the factors affecting the armor and survivability sector being reshaped by advancements in design, technology, changing military needs, and international security challenges,” Cordova added.

A Parade of Solutions
During AUSA, Integris is showcasing a parade of composite armor kits and personal protection plates designed, engineered and manufactured for multiple contracts with Defense Department and OEM suppliers. They include:

• ESAPI & XSBI Plates
• Aircraft armor
• Add-on armor – Stanag level III to VI
• Maritime armor
• Mine/blast – ABDS
• Low-profile armor systems

An Enduring Mission & New Wins
“We are proud of our accomplishments in the recent year,” said Andrew Bonham, president of Integris Composites, Inc.

He said Integris has been selected as the sole supplier of armor systems by Bell Textron Inc. for the V280 Valor, the Army’s platform for its Future Long-Range Assault Aircraft (FLRAA). It will replace the aging UH-60 Black Hawk helicopters, providing increased speed, range and payloads.

In addition, new MH-139A Grey Wolf helicopters that will replace the UH-1N Huey for the Air Force incorporate armor designed and manufactured by Integris. Boeing delivered the first production aircraft in August, Bonham added.

“In the recent past, Integris armor kits were selected by Mack Defense for the M917 Heavy Dump Truck, and we are supplying armor kits for the C-130 J tactical airlifter.” Integris continues to be a major provider of personal protection ballistic plates for multiple military and tactical law enforcement units, and we are especially proud of being named the leading supplier of the X-Side Ballistic Insert (XSBI) plates. Known for their lightweight design, they offer additional protection along the side of the torso, explained Bonham.

“Despite changes, our commitment to saving lives remains unchanged,” said Bonham. Integris is an engineering company and the manufacturer of composite armor for land vehicles, aircraft, naval craft, protection housing for optronics and other sensitive technology and personal protection gear.

The company’s scope includes the design, development, production, sales, and services of composite armor solutions worldwide. Integris’ product portfolio consists of panels or ready-to-install kits made from high-strength materials like UHMWPE, aramids, ceramics and metal.

Photo:
New MH-139A Grey Wolf helicopters incorporate armor designed and manufactured by Integris. DoD Photo by Samuel King, Jr. Does not imply or constitute DoD endorsement.

Integris has been selected as the sole supplier of armor systems by Bell Textron Inc. for the V280 Valor, the Army’s platform for its Future Long-Range Assault Aircraft (FLRAA)V-280 in flight. Photo by Danazar – Creative Commons

Contact:
David Cordova
Chief Commercial Officer
+1 704 458 7796
David.Cordova@IntegrisCompositesUS.com

Photos:
https://www.prlog.org/13043015

Press release distributed by PRLog

View original content:https://www.prnewswire.com/news-releases/integris-composites-displays-new-military-armor-at-ausa-2024-302274642.html

SOURCE Integris Composites, Inc.