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December 4: Billionaire tax rests on a disputed $14,729 refund

Democratic dreams of imposing a wealth tax on the richest Americans risk being snuffed out by the U.S. Supreme Court in a dispute over a $14,729 bill.

Calls to tax assets in addition to income have grown since Senator Elizabeth Warren ran for the White House on the issue in 2020, with President Joe Biden's 2024 budget requesting a "Billionaire minimum tax" to ease the federal deficit.

"The case literally could involve trillions of dollars and directly affect the way our economic and tax systems work because it calls on the court to decide whether a wealth tax might be constitutional," said John Yoo, a University of California at Berkeley law professor who helped draft a brief in the case for the anti-tax group FreedomWorks.

A victory for the Moores could cause "Chaos" across the federal tax code and invite litigation over a swath of provisions enacted over decades, said Chye-Ching Huang, executive director of the Tax Law Center at New York University's law school.

The Biden administration says the court can uphold the mandatory repatriation tax without making any judgment on a hypothetical wealth tax.

Quoting from a 1943 Supreme Court case, U.S. Solicitor General Elizabeth Prelogar said the court traditionally "Does not decide whether a tax may constitutionally be laid until it finds that Congress has laid it."

Prelogar, the administration's top Supreme Court lawyer, said a wealth tax, which would be levied on assets at a particular point in time, would be "Fundamentally distinct" from an income tax, which targets economic gains over a period of time.

December 4: IRS spots $37.1B in tax and financial crimes

The Internal Revenue Service's Criminal Investigation unit identified $37.1 billion in tax and financial crimes in fiscal year 2023, exceeding the previous fiscal year, while leveraging new technology to ferret out wrongdoing, according to a new report.

That's up from fiscal year 2022, when IRS CI initiated more than 2,550 criminal investigations and identified over $31 billion from tax and financial crimes.

"IRS Criminal Investigation plays a vital role for tax administration and law enforcement, and the results from the past year dramatically illustrate the results," said IRS Commissioner Danny Werfel in a statement Monday.

At the same time, the IRS is facing the threat of budget cuts from Republicans in Congress, with House Republicans voting last month to cut $14.3 billion in funding from IRS enforcement to fund aid to Israel.

The extra funding was allocated to the IRS by the Inflation Reduction Act last year, which led to rumor that the money would be used to pay for armies of armed IRS agents.

"We are still dealing occasionally with the wildly inappropriate misinformation that's out there regarding IRS agents being armed, which is quite frankly inappropriate and incredibly dangerous," said IRS CI chief Jim Lee during a press conference Monday.

Close to 70% of IRS CI's time is focused on tax-related crimes, with the remaining financial crimes tied to activities such as narcotics trafficking, bank secrecy and money laundering.

November 30: Senate Democrats aim to close loopholes for billionaires

A group of Senate Democrats and independents introduced the Billionaires Income Tax Act, aiming to close tax loopholes exploited by billionaires. 

This legislation seeks to amend the Tax Code, targeting strategies like "buy, borrow, die," which allow billionaires to indefinitely defer taxes. The bill would affect approximately 700 taxpayers with an annual income over $100 million or assets exceeding $1 billion for three consecutive years. It is designed to raise hundreds of billions of dollars, potentially bolstering funding for programs like Social Security and Medicare.

Key provisions of the bill include taxing gains and losses from assets annually, with tradable assets like stocks being marked to market each year. This means billionaires would pay taxes on gains or deduct losses annually, regardless of whether they sell the asset. 

For nontradable assets like real estate or business interests, a "deferral recapture amount" would be charged upon sale, functioning like interest on the tax deferred while holding the asset. 

The bill also proposes measures to prevent tax avoidance and includes a transition phase where billionaires can elect to pay taxes on marked-to-market tradable assets over five years. 

Introduced by Senate Finance Committee Chairman Ron Wyden (D-Oregon) and supported by 15 other senators, the bill aims to ensure that billionaires pay a fair share of taxes, addressing the disparity where average workers, like nurses or firefighters, face higher tax rates than the ultra-wealthy. The legislation has garnered support from over 100 organizations, including major unions and advocacy groups.

November 30: Key inflation measure drops ahead of Fed’s last meeting of the year

The Federal Reserve's preferred inflation gauge, the personal consumption expenditures (PCE) price index, has shown a significant decrease, reaching its lowest point in over two and a half years. 

As of October, the annual increase in the PCE index was recorded at 3 percent, a notable reduction from the 3.4-percent increases observed in the previous three months, marking the lowest rate since March 2021. 

This decline in inflationary pressure is further evidenced by a slowdown in personal income growth, which increased by only 0.2 percent in October, compared to higher rates in the preceding months. 

Financial markets are responding to these trends, with expectations leaning towards the Federal Reserve maintaining its current interest rate range of 5.25 to 5.5 percent at its next meeting. 

This market sentiment aligns with predictions from financial data company CME, which forecasts a 96-percent chance of steady rates, diverging from the Fed's earlier projection of an additional rate hike this year.

Inflation trends are also reflected in the core PCE index, which excludes the more volatile food and energy sectors. This index showed a decrease to a 3.5-percent annual increase in October, continuing its downward trajectory from previous months. 

Both the core and headline PCE figures are currently below the Federal Reserve's year-end expectations. This pattern mirrors the Labor Department's consumer price index (CPI), which remained steady in October, indicating a 3.2-percent annual increase. 

Federal Reserve officials, including board member Christopher Waller, are expressing growing confidence in the effectiveness of current monetary policy in slowing down the economy and steering inflation towards the 2 percent target, bolstered by recent data suggesting a moderation in economic activity.

November 29: Supreme Court considering SEC fraud detection measures

During a Supreme Court hearing, conservative justices appeared receptive to a challenge against the Securities and Exchange Commission's (SEC) method of combating fraud. 

This case could significantly impact the enforcement strategies of various regulatory agencies. The majority of the nine-member court suggested that individuals accused of fraud by the SEC should have the option of a jury trial in federal court, rather than facing the SEC’s in-house administrative law judges. 

The case in question involves hedge fund manager George R. Jarkesy, whose severe financial penalties imposed by the SEC were overturned by a lower court. Justice Brett Kavanaugh expressed concerns about the fairness of the current system, where substantial financial penalties can be imposed in a tribunal perceived as potentially biased.

The implications of this case extend beyond the SEC, as noted by Justice Department lawyer Brian Fletcher, who warned that the decision could affect roughly two dozen agencies with similar enforcement mechanisms. 

The case is part of a broader trend where conservative and business interests are urging the court to limit the powers of federal regulators. This trend was evident in a recent decision that significantly curtailed the ability of agencies to regulate water pollution in wetlands. 

The Supreme Court's decision in SEC v. Jarkesy, expected by early summer, could reshape the landscape of regulatory enforcement, potentially shifting many cases from administrative proceedings to federal courts. This shift could impact the SEC's effectiveness, as it currently has a higher success rate in front of its administrative law judges compared to federal court trials.

November 28: Young says labor issues could lead to bipartisan disagreements on AI regulation 

Senator Todd Young (R-Ind.) has observed emerging bipartisan disagreements in Congress regarding the regulation of artificial intelligence (AI), particularly in relation to labor issues. 

Speaking at the Axios AI+ Summit, Young expressed his initial surprise at the bipartisan consensus during the closed-door AI Insight Forums, which have so far shown little significant disagreement on the government's role and worker protection against AI technology. 

However, he anticipates more contention as discussions progress through committees and become more public, suggesting that the presence of media and constituent expectations might lead to less willingness to compromise among lawmakers.

Senator Young, part of a small bipartisan group led by Senate Majority Leader Chuck Schumer (D-N.Y.) focused on AI regulation, holds a cautiously optimistic view of AI. He is concerned about the U.S. potentially overregulating AI and falling behind global competitors like China, but he also acknowledges the potential dangers of AI, such as its use in creating harmful organisms. 

In a lighter application, Young mentioned using OpenAI’s ChatGPT in his office for creative tasks like brainstorming softball team names. 

The Senate's ongoing engagement with AI issues includes the seventh AI Insight Forum, which is set to focus on intellectual property and copyright issues. This forum will feature participants from various sectors, including a negotiator from SAG-AFTRA, a union that has recently secured protections against AI, and representatives from Sony Music Entertainment, the Motion Picture Association, and Spotify.

December 1: 5 reasons why COP28, the UN climate talks, are worth your attention

The annual U.N. climate talks, known as the Conference of Parties (COP), are currently in their 28th iteration in Dubai, often eliciting confusion or indifference from the general public due to their complex nature and non-binding outcomes.

Despite this, the talks play a crucial role in global climate change efforts. They create a platform for peer pressure among nations through the development of Nationally Determined Contributions (NDCs), where countries outline their plans to reduce greenhouse gas emissions and adapt to climate impacts. 

These public plans allow for scrutiny and encourage nations to enhance their climate goals. The COP also establishes clear global objectives, such as the Paris Agreement's target to limit global temperature rise to below 2 degrees Celsius, ideally 1.5 degrees Celsius. This goal has become a benchmark for various climate-related discussions and decisions worldwide.

The COP serves as a forum for framing important debates and fostering slow but steady progress in addressing climate change. For instance, COP27 in Egypt marked a significant shift by introducing the concept of a "loss and damage" fund to support developing nations affected by climate change, a topic previously marginalized in discussions. 

Over the years, COP negotiations have contributed to a reduction in projected global warming, with current models predicting a rise of 2 to 2.5 degrees Celsius, an improvement over previous estimates. 

Despite criticisms of its pace and effectiveness, the COP remains the only comprehensive international mechanism for addressing climate change, offering a unique opportunity for countries and various stakeholders to negotiate and share ideas on a global scale. This process, while often slow and complex, is essential in the collective effort to combat climate change.

November 29: U.S. weighs reprieve for carmakers on EV credits

The Biden administration has discussed granting automakers a temporary reprieve from new rules poised to limit a consumer tax credit for electric vehicles that contain certain materials from foreign adversaries, a Michigan senator said Tuesday.

Even a temporary delay would have major implications for electric vehicle makers like Tesla Inc., General Motors Co. and Ford Motor Co. as well as on consumers.

Tesla already has warned customers the tax credit likely will be reduced next year under the new rules.

The requirements, which were included in President Joe Biden's signature climate law, don't allow tax breaks for vehicles containing battery components or critical minerals from foreign entities of concern starting in 2024 and 2025, respectively.

Guidance expected this week by the Treasury Department will define which nations are foreign entities of concern and spell out details of how much content from foreign adversaries will be allowed in the electric vehicle battery supply chain.

Scott Sklar, president of The Stella Group Ltd., a strategic clean energy technology firm, said Treasury officials had discussed with him a transition period to give the U.S. domestic battery industry time to ramp up.

"We are going to have lots of battery capacity in the United States. It's just not right this second," Sklar said, adding that 14 battery plants are under construction in the U.S. The requirements were put in place at the behest of Democratic Senator Joe Manchin, who provided the law's pivotal vote last year and voiced concern the tax credit was subsidizing nations hostile to U.S. interests.

November 29: House panel introduces bipartisan federal lands improvement bill

House Natural Resources Committee Chair Bruce Westerman (R-Ark.) and Ranking Member Raul Grijalva (D-Az.) introduced the bipartisan Expanding Public Lands Outdoor Recreation Experiences (EXPLORE) Act, aimed at enhancing the experience of visitors to federal lands and parks. 

This legislation focuses on several key improvements, including upgrading broadband connectivity in these areas, modernizing infrastructure, and enhancing accessibility for visitors with disabilities. 

Emphasizing the importance of outdoor exploration as a core aspect of American identity, Westerman highlighted the bill's objectives to modernize visitor experiences, alleviate overcrowding, and streamline permitting processes for small businesses reliant on access to public lands. 

Grijalva underscored the need for conservation and equitable access to outdoor recreation for all Americans, regardless of their location.

The EXPLORE Act is scheduled for a subcommittee hearing in the Federal Lands Subcommittee, with a companion bill, the America’s Outdoor Recreation Act, introduced in the Senate by Senators Joe Manchin (D-W.V.) and John Barrasso (R-Wyo.). 

This legislative effort aligns with ongoing advocacy for improved accessibility in national parks, a topic that gained attention in 2021 during a hearing led by Rep. Katie Porter (D-Calif.) on National Park Service accessibility. 

Porter emphasized the necessity of accommodating a diverse range of abilities, suggesting that the issues of accessibility in national parks are solvable with appropriate attention and action.

November 29: Harris to attend UN climate summit in Dubai in Biden’s absence

Vice President Kamala Harris is set to represent the United States at the COP28 United Nations climate summit in Dubai, as President Joe Biden will not be attending this year's event. 

Harris's participation in the summit, scheduled for Friday and Saturday, underscores the Biden administration's commitment to addressing climate change, a key aspect of their domestic and international policy. 

During the summit, which includes a World Leaders Summit, Harris will highlight the significant strides made by the Biden-Harris administration in implementing a robust climate agenda. 

Her presence is part of a broader pattern of her representing the administration in international forums, following her previous engagements at the Munich Security Conference and a trip to Africa earlier in the year.

President Biden, who has attended the United Nations climate summits in the past two years, spoke with United Arab Emirates President Mohamed bin Zayed ahead of COP28, discussing the Middle East conflict and expressing gratitude for the UAE's hosting of the event. 

Biden's focus on climate change has been evident through significant legislative actions, including passing a bill with major renewable energy subsidies and rejoining the Paris Agreement, which the U.S. had left under former President Trump. 

While some climate activists have expressed disappointment over Biden's absence at this year's summit, others believe it will not significantly affect the conference's outcomes. The United States remains a major contributor to global greenhouse gas emissions, historically being the largest emitter.

November 30: Penguin parents sleep for just a few seconds at a time to guard newborns, study shows

New research has revealed that chinstrap penguins in Antarctica have a unique way of balancing sleep with the vigilant care of their eggs and chicks. 

In the crowded and noisy conditions of their colonies, these penguins take thousands of mini-catnaps each day, each lasting only about four seconds, to remain alert to potential threats. This pattern of "microsleeps," amounting to roughly 11 hours of sleep per day, enables the penguins to stay functional for weeks on end during the breeding season. 

The study, published in the journal Science, highlights the penguins' ability to successfully raise their young despite these brief rest periods.

The research involved attaching sensors to 14 adult chinstrap penguins on King George Island, off the coast of Antarctica, to track their brain waves and confirm their sleeping behavior. 

This study was inspired by biologist Won Young Lee's observations of the penguins' frequent blinking and apparent dozing. The findings suggest that these microsleeps serve a restorative function, allowing the penguins to endure the demanding breeding season. 

While it's unclear if other penguin species sleep similarly or if the benefits of microsleep are equivalent to longer, consolidated sleep, this discovery adds to the understanding of unique sleep adaptations in animals. 

For instance, frigatebirds can sleep with one half of their brain while flying, and northern elephant seals take brief naps during deep dives. The chinstrap penguins' microsleeps, however, represent a new extreme in animal sleep patterns, particularly in their high-stress, predator-rich environment.

November 29: New technology installed beneath Detroit street can charge electric vehicles as they drive

Detroit has introduced what is claimed to be the nation's first public wireless-charging roadway for electric vehicles, a significant advancement in EV infrastructure. 

Installed beneath a section of 14th Street just west of downtown Detroit, this quarter-mile segment features copper inductive charging coils embedded in the road. These coils enable vehicles equipped with compatible receivers to charge their batteries while driving, idling, or parking above them. 

Currently in a testing phase, the Michigan Department of Transportation aims to refine the technology for public use within a few years. This initiative was demonstrated at the Michigan Central innovation district, a center for developing advanced technologies, including Ford Motor Co.'s efforts in self-driving vehicles.

The technology, developed by Electreon, an Israel-based company, is part of a pilot initiative announced in 2021 by Michigan Governor Gretchen Whitmer. 

Electreon has similar projects in Israel, Sweden, Italy, and Germany. The system works by transferring electricity through a magnetic field from the coils to the vehicle's battery as it passes over them, activating only when a vehicle with a receiver is present. The technology is deemed safe for pedestrians, motorists, and animals. 

The Michigan Department of Transportation, in partnership with Electreon, has committed to a five-year project to develop this electric road system, including plans to rebuild part of Michigan Avenue with inductive charging. 

This project aligns with the Biden administration's infrastructure goals, which include expanding EV charging stations across the United States. While revenue models for Michigan's wireless charging roads are yet to be decided, the technology is designed to identify verified users for charging, indicating a potential future where EVs are more seamlessly integrated into transportation infrastructure.

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