Joe the not so sleepy – Posted in invest.ch – 12.05.2021
"Sleeping Joe"? But where did Donald Trump get this expression to qualify his opponent in the presidential elections??
"Sleeping Joe"? A man who turns out to be hyperactive, domestically and internationally? A man who 100 days administered more than 240 million doses of COVID-19 vaccine and spent $6 trillion (6’000’000’000’000!) in three shots (revival of the economy, renovation of infrastructure and support for families), which is as much as the GDP of Germany and Italy combined!
The Biden plan
To finance this vast program, “Not-so-sleepy Joe” provides the answer: corporate tax will be raised by 21 to 28%. More interesting, U.S. companies that pay less than 21% will be taxed in the United States for the difference. And Jo Biden goes even further by proposing to all countries around the world to set 21% the minimum corporate tax rate, thus targeting large international groups which optimize their taxation with the help of countries with overly welcoming taxation.
In the line of sight, we find Ireland, Switzerland, Hong-Kong, Singapore or Luxembourg and its famous “tax ruling”. France and Germany have already announced that they are in favor of it. You surprise me… Finally, Joe Biden proposed to raise 20 to 39.6% the tax rate on capital gains and 37 to 39.6% the marginal tax rate for the 500,000 households earning more than a million dollars. A program that would make Bernie Sanders blush…
Elsewhere in the world
And meanwhile, all central banks continue to flood the markets with liquidity intended to keep rates as low as possible: Currently, the FED buys back for 120 billions of dollars of bonds on the markets each month. But voices are starting to be raised to ask to start talking about the “adjustment” of these buyouts, Robert Kaplan, president of the Dallas Fed, first.
Besides, the Central Bank of Canada announced that it was starting to reduce the amount of its asset purchases from 26 avril. The Beginning of the End of Free Money? We will have to monitor rates very closely.