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Joe Biden is poised to announce a $1.8tn plan to expand America’s social safety net, which will be funded by hefty tax increases on the wealthiest households, senior administration officials said.
The proposal, spanning a decade and covering areas such as child care, paid leave, education and healthcare, marks the third leg of the US president’s multitrillion-dollar economic agenda, and is expected to be the focus of his first speech to a joint session of Congress on Wednesday night on the eve of his 100th day in office.
The scale of the latest plan — to be called the “American Families Plan” — is larger than expected just a few weeks ago, and reflects Biden’s ambition to remake the US economy with greater government support for struggling households far beyond immediate relief provided during the pandemic.
Tax lobbyists warn that the president faces an uphill climb turning the plan into legislation, putting it at risk of being watered down as lawmakers wrestle with it in the months to come. One stumbling block is likely to be Democrats from affluent districts including suburbs in New York, New Jersey, California and Illinois, on top of the predictable Republican opposition.
The Biden administration has bet that tax increases on the very wealthy will not be as politically toxic as feared, and could even prove popular in the wake of the big gains in equity markets during the coronavirus pandemic.
If you are interested in reading more on the intersection of money and power in US politics sign up to Swamp Notes, a twice-weekly newsletter written by FT columnists Rana Foroohar and Edward Luce.
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Global IPOs begin 2021 at breakneck pace Stock market listings around the world are running at a record pace, with deal numbers and values at their highest levels for the start of any year in at least two decades. The deluge of listings has lifted IPO proceeds to a record-setting $230bn this year, according to Dealogic, well above the previous peak of $80bn set in 2000.
Google profits hit record The tech giant’s parent Alphabet reported record results for the first quarter as homebound users watched videos and clicked on web advertisements served by the company, which also announced a $50bn share buyback programme. Microsoft beat expectations on the back of surging demand for PCs and game consoles as well as cloud services. For the latest tech industry news sign up to our #techFT newsletter.
EU to charge Apple with anti-competitive behaviour EU competition chief Margrethe Vestager will this week charge the iPhone maker with anti-competitive behaviour over concerns raised by Spotify that App Store rules for developers break EU law. Ten months after Apple promised “enhanced privacy features” for iPhones, the changes have finally arrived. Here’s how they are shaking up the app economy.
Biden signs order to raise federal minimum wage The US president on Tuesday signed an executive order forcing federal contractors to pay a minimum wage of $15 an hour as he increased pressure on businesses and Congress to raise workers’ pay.
Saudi crown prince says he wants to mend differences with Iran Mohammed bin Salman said in a Saudi television interview that Riyadh wants to resolve its differences with rival Iran, a marked shift in tone in the wake of the election of US president Joe Biden.
European MEPs approve Brexit trade deal Britain’s post-Brexit trade deal with the EU cleared its last political hurdle on Wednesday, after the European Parliament approved it by an overwhelming majority, even as they branded it a “historic mistake”. Sign up here for our Europe Express newsletter, your essential guide to what matters in Europe today, every weekday morning.
Canada hails a ‘breakthrough moment’ on tax Chrystia Freeland, Canada’s finance minister, called the US proposal for a global minimum corporate levy a “breakthrough moment” in an interview with the Financial Times. On Tuesday, France’s and Germany’s finance ministers said they would support the 21 per cent minimum corporate tax rate Washington was proposing.
China set to report first population decline in 5 decades The latest Chinese census, which was completed in December but has yet to be made public, is expected to report the country’s total population at less than 1.4bn, its first decline since Mao Zedong’s disastrous Great Leap Forward, despite the relaxation of strict family planning policies in 2015.
Samsung heirs reveal legacy plan The family of late Samsung patriarch Lee Kun-hee has pledged billions of dollars in healthcare spending and art donations and vowed to pay $11bn in one of the world’s biggest-ever inheritance tax bills. Following Lee’s death in October, South Korea’s most powerful family was given six months to tell tax officials how they would deal with the estate of the country’s wealthiest man.
Fed meeting Investors will be watching the Federal Reserve’s post-meeting press conference today for any indication from chair Jay Powell about the US central bank’s thinking on inflation.
Earnings It’s another big day for earnings: Apple is expected to post stellar quarterly results with revenues of $76.6bn, while among the other tech, ecommerce and social media companies reporting are Facebook, eBay, Shopify and Spotify.
China is wrong to think the US faces inevitable decline While America could falter, that would be its choice and not its fate, writes Martin Wolf. Its economic assets are too great. That has been the basis of its global power and influence. So how does its innovative power look today? The answer is: rather good, despite competition from China.
Wall Street beware: the SEC’s Gensler carries a big stick The last time Gary Gensler ran an American financial regulator, he was charged with cleaning up the mess left by the 2008 crash. Now the new chair of the US Securities and Exchange Commission is under pressure to clamp down and deflate any bubbles before they burst, writes Brooke Masters.
Credit Suisse: plotting a comeback after ‘costly mistakes’ The twin failures of Greensill Capital and Archegos have put Credit Suisse in the spotlight for all the wrong reasons, raising doubts about the 165-year-old bank’s very existence and whether it will be broken up or survive in a European banking market that is under pressure to consolidate.
The new wave of crypto users A growing number of Latin Americans are using cryptocurrency to send remittances from the US to family back home. While technological barriers still exist, crypto allows migrant workers to avoid high commission fees and has gained popularity amid currency devaluation concerns. (Rest of World)
Building better jobs for the young What do young people want from the world of work? Tired tropes about “job-hoppers” in search of “meaning” are a distraction. Most youngsters want what their parents and grandparents wanted: a decent income, a chance to progress and enough security to build a life on. The trouble is, too few are getting it.
Have you recently graduated? As part of a reporting project, we want to hear how the past year has been for you. Please share your stories and thoughts in our survey.
The finances of moving overseas After months under lockdown, 31-year-old finance professional Viktoria is planning to relocate overseas. She talks to Claer Barrett about her desire to escape corporate life in London and her concerns about the fate of her property, pensions and investments.