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Crypto Takes a Beating as Biden Seeks To Raise Capital Gains Tax

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  • Investors quickly began selling off sizable amounts of their crypto holdings Thursday amid reports that President Joe Biden will soon propose doubling the capital gain tax rate for investors making more than $1 million annually.
  • Among the coins that took heavy beatings were Ethereum, Dogecoin, and Bitcoin, which saw its worst day since February, dropping below 48,000 after a recent peak of nearly 65,000. Outside of crypto, major stock indices largely shrugged off the news. 
  • Through a capital gains tax hike, Biden hopes to fund his “American Families Plan,” which includes provisions for childcare, universal prekindergarten, paid family leave, and free community college. 
  • Biden’s proposal is unlikely to pass as is. Instead, economists project that if Congress can agree on the hike, it will likely still be substantial but much more modest in nature.

Cryptocurrencies Slide 

Cryptocurrencies like Bitcoin, Ethereum, Dogecoin saw major selloffs Thursday evening after multiple news outlets reported that President Joe Biden is preparing to move forward with his plans for a substantial capital gains tax on high earners.

Notably, Bitcoin fell from $55,000 a coin to under $48,000 in the course of a single day, making Thursday easily its worst day since February even though the coin peaked at nearly $65,000 just over a week ago. As of 2 p.m. EST Friday, Bitcoin had once again passed the $50,000 mark. 

Similarly, Dogecoin — which has experienced massive gains over the past week — fell over 40% at one point during the evening. As of Friday, Dogecoin has recovered some of those losses, but it is still trading at around 50% of the all-time high of $0.45 that it reached last week.

In total, the cryptocurrency market experienced a $200 billion plunge following the news, according to data from CoinMarketCap.

Meanwhile, the rest of the stock market was largely unaffected. The Dow Jones, S&P 500, and Nasdaq all ended slightly up by Thursday’s closing bell, and all three major indices were still in the green as of midday Friday.

Many expect Bitcoin’s recent drop to only be a temporary setback, predicting that the stock will continue to climb to new highs in the near future.

“I don’t think Biden’s taxes plans will have a big impact on bitcoin,” Ruud Feltkamp, CEO at automated crypto trading bot Cryptohopper, told Reuters. “Bitcoin has only gone up for a long time, it is only natural to see a consolidation. Traders are simply cashing in on winnings.”

Biden’s Tax Plan

Biden is expected to propose a plan that would essentially double capital gains taxes — the taxes paid by investors once they sell-off profitable stock — for people earning $1 million or more through investing.

Currently, the long-term capital gains base rate for those high earners is 20%; however, Biden reportedly wants to raise it to 39.6%. Coupled with an existing surtax on investment income, federal taxes could then climb as high as 43.4% of earnings.

Since the campaign trail, Biden has promised to raise capital gains and income taxes on high earners, arguing that it’s unfair for them to pay lower rates than middle-class Americans. 

According to White House Press Secretary Jen Psaki, the president will officially release his tax rate proposal next week as part of his “American Families Plan.” That plan, which would be funded by the tax increases, will reportedly include provisions for childcare, universal prekindergarten, paid family leave, and free community college. 

A 39.6% rate cap for high earners is unlikely to ever become reality. As Axios’ Hans Nichols reported, if passed, that number would more than likely wind up around 30% following negotiations in Congress. While that would still amount to a significant tax hike, it would also be significantly lower than Biden’s current reported goal. 

If passed later this year, it is currently unclear whether a capital gains increase would be retroactive to 2021 taxes or if it will go into effect next year, though a current proposal regarding corporate tax hikes would not be applied until next year, if passed.

See what others are saying: (Bloomberg) (Axios) (Reuters)

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Student Group Selling NFTs of Trump Tweets Will Donate Sales To “Charities He Hates”

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  • Several students known as Strategic Meme Group are selling over 46,000 tweets from former President Donald Trump as NFTs in a bid to reclaim some of his most controversial messages. 
  • The students said 100% of the sales will go “to charities [Trump] hates,” including organizations that benefit communities the one-term president targeted on Twitter. For example, sales from Trump’s “ChinaVirus” tweets will go to charities such as the Asian Pacific Fund.
  • “As an [Asian and Pacific Islander] person myself, and also our founders Jason Yu and Theodore Horn… Trump’s tweets have had a negative impact on us,” Jackie Ni, Chief Meme Officer of SMG, told Rogue Rocket on Friday. “And so, we were just thinking, ‘Is there a way to get something good out of this? Is there a way that we can potentially benefit the community being harmed?’
  • So far, Ni said the group has raised $9,500 through the sale of 118 tweets.

Trump Tweets for Sale

A group of high school and college students have taken former President Donald Trump’s most controversial tweets and turned them into nonfungible tokens in an attempt raise funds for the groups he targeted online.

“Trump tweets for sale,” their website, drumpfs.io, reads. “100% profits to charities he hates. Environmentally friendly.”

Source: drumpfs.io

In total, 46,964 of the one-term president’s tweets are for sale on the site, including some of his more racially charged messages.

That includes tweets involving multiple uses of the term “ChinaVirus,” which has been condemned by critics as racist and a contributor to the recent uptick in violence against Asian Americans since the beginning of the coronavirus pandemic. 

But the students behind this project, known as Strategic Meme Group (SMG), are hoping to reclaim those tweets by donating their sales to specific charities, including the Asian American Legal Defense and Education Fund and the Asian Pacific Fund.

“We don’t want people to forget about the things Trump did or the things he said,” Jackie Ni, Chief Meme Officer of SMG, told Rogue Rocket on Friday. “This man is really flawed. This man is actually really hateful. If you look at his past tweets, these are not presidential. These are not human honestly.”

“As an [Asian and Pacific Islander] person myself, and also our founders Jason Yu and Theodore Horn… Trump’s tweets have had a negative impact on us,” Ni added. “And so, we were just thinking, ‘Is there a way to get something good out of this? Is there a way that we can potentially benefit the community being harmed?’”

Source: drumpfs.io

Some of the other tweet-specific charities featured on the site include the Clinton Foundation, Americares, Clean Air Task Force, the American Civil Liberties Union, the Southern Poverty Law Center, Doctors Without Borders, and the National Association for the Advancement of Colored People.

The site also lists a “general fund,” which Ni said is used for tweets that are harder to categorize. Ni said SMG will ultimately hold a vote to determine which charities those sales go toward once the fund reaches a $10,000 threshold.

How Much is a Drumpf NFT?

On the site, Trump’s tweets are divided into four categories: for sale, infamous, deleted, and flagged. 

The vast majority of his tweets are being sold for 0.0232 Ethereum, which was valued at around $81 as of Friday morning. Notably, 232 is the number of electoral college votes Trump received during the 2020 Presidential Election. 

A smaller subset of Trump’s most infamous tweets, such as covfefe,” are being sold for 4.5 Ethereum, which was just shy of $16,000 as of Friday morning.

Ni said SMG has already raised over $9,500 through the sale of 118 NFTs since launching the website on April 22. Most of the tweets are ones Ni described as ironically “funny,” as the majority of them include Trumps’s infamously-iconic catchphrases “drain the swamp,” “fake news,” etc.

“And it’s not funny that like we’re laughing with Trump,” Ni told Rogue Rocket. “It’s more like we’re laughing at him.”

Ni said he expects sales to cross the $10,000 threshold soon, and from there, the group will begin the process of determining how to best donate to the listed charities since converting from Ethereum to U.S. dollars involves multiple steps.

What is SMG?

SMG is actually the second political venture for these students. 

In 2020, Ni, Horn, and Yu started MemePac, which Ni described as a “youth, Gen Z super PAC” designed to oppose Trump. The group quickly gained significant traction on TikTok with more than 350,000 followers and was even featured in The New York Times

Ni said much of the inspiration behind Drumpfs, which is a nod to a 2016 John Oliver segment where he highlighted that one of Trump’s ancestral names is “Drumpf,” comes from the recent boom of tweets being converted into and sold as NFTs. In an interview with NowThis, Horn credited Twitter CEO Jack Dorsey’s sale of his first tweet for $2.9 million in March. 

Ni told Rogue Rocket that SMG was able to access the full catalogue of Trump’s tweets since they have all been archived by other organizations. As NFTs are still young, there’s little regulation behind them, meaning that the group isn’t barred for selling tweets they never posted themselves.

Environmentally Friendly”

The advent of NFTs, and more specifically blockchain technology in general, has concerned many environmentalists because of the sheer electrical energy that it requires.

With that concern in mind, Ni said SMG wanted to ensure that it worked to offset carbon emissions generated by its NFTs. 

“As a progressive Gen Z group, how can we advocate for a technology and use something that gives so much carbon emissions?” Ni said.

“What we’re trying to do to offset that is that we’re buying carbon offsets [through GoldStandard.org] double the amount generated,he added.

See what others are saying: (The Hill) (Now This)

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Washingtonian Staffers Refuse To Publish in Protest of CEO’s Op-Ed About “Risks of Not Returning” To in-Person Work

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  • Washingtonian editorial staffers refused to publish new content Friday in response to an op-ed their CEO Cathy Merrill wrote about employees who wanted to continue doing the majority of their work remotely, which many viewed as a public threat to their jobs.
  • In the op-ed, Merrill suggested that “about 20 percent” of every office employees’ job is to participate in “extras” outside their core responsibilities, including “mentoring more junior people” and “celebrating someone’s birthday.”
  • If employees aren’t around to do so, she suggested managers have a “strong incentive” to change an employee’s work status to “contractor” to avoid paying for healthcare, a 401(k) match, and other benefits.
  • After widespread backlash, Merrill walked back on her comments in an internal memo to staffers.

Op-Ed Triggers Outrage

Editorial staff at Washingtonian, a DC-based magazine, refused to publish new content on Friday in response to an op-ed their CEO wrote that many staffers viewed as a public threat to their jobs. 

Cathy Merrill published her op-ed in The Washington Post Thursday, titled: “As a CEO, I want my employees to understand the risks of not returning to work in the office.”

In it, Merrill expressed excitement about the prospect of returning to work in person but said she was concerned about employees who wanted to continue doing the majority of their work remotely.

She claimed fellow CEOs have told her that older employees are more reluctant to return to the office because they work “from comfortable homes” and are “happy to be relieved of commuting.” Meanwhile, their younger colleagues “have been working from small apartments or their parents’ homes.”

Merrill argued that this was an issue because companies need leaders on site, and she suggested that “about 20 percent” of every office employees’ job is to participate in “extras” outside one’s core responsibilities. This includes in-person activities, such as “mentoring more junior people,” “celebrating someone’s birthday,” and doing other things that “drive office culture.”

If employees aren’t around to do so, she suggested that managers have a “strong incentive” to change an employee’s work status to “contractor.”

“That would also mean not having to pay for health care, a 401(k) match and our share of FICA and Medicare taxes — benefits that in my company’s case add up roughly to an extra 15 percent of compensation,” she continued.

“Not to mention the potential savings of reduced office space and extras such as bonuses and parking fees.”

Merrill also argued that “professional development is hard to do remotely,” and said “being out of that informal loop is likely to make you a less valuable employee.”

She closed her piece by suggesting that those who maintained personal relationships with their bosses would have more job security because “the hardest people to let go are the ones you know.”

Employees Protest

The op-ed was met with swift condemnation from fellow members of the media, as well as readers.

By Friday morning, The Washington Post had changed the op-ed’s headline to: “As a CEO, I worry about the erosion of office culture with more remote work.”

According to HuffPost reporter Dave Jamieson, “Merrill says she did not write the original headline to her op-ed and expressed to WaPo that she felt it was inaccurate.”

The Post’s Editorial Page Editor Fred Hiatt said in a statement to CNN Business that he asked his staff to change the headline and said “nothing else in the op-ed has been changed.”

The change did little to ease outrage, and on Friday morning, Washingtonian staffers tweeted identical statements announcing their decision not to publish for the day.

“As members of the Washingtonian editorial staff, we want our CEO to understand the risks of not valuing our labor. We are dismayed by Cathy Merrill’s public threat to our livelihoods. We will not be publishing today,” the tweets read.

The staff is not unionized, so the refusal to work is especially notable because it carries extra risks.

CEO Walks Back

The growing outrage prompted Merrill to walk back her remarks in an internal memo to staff Friday, saying “flexible with work schedules and time in the office,” along with health and 401K benefits will not change. She said she is not going to switch full time workers to freelancer status, as she suggested in her op-ed.

“These are critical parts of our culture and also things I deeply, personally believe in,” Merrill said in the memo that reported have since shared online.

“I can and will maintain this strategy because we are a small family-owned company and I can. But I do worry about larger less personal businesses and how that may affect our country. That is precisely why I wrote the piece.”

In an earlier statement, Merrill said, “I have assured. out team that there will be no changes to benefits or employee status. I am sorry if the op-ed made it appear like anything else.”

See what others are saying: (CNN) (The Wrap) (The New York Times

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Unemployment Claims Fall for 4th Straight Week, Finally Dipping Below 500,000

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  • Unemployment claims fell to 498,000 last week, marking the first time claims dipped below half a million since coronavirus pandemic closures began.
  • It’s also the fourth straight week of declining unemployment claims, though the numbers are still well above the roughly 200,000 weekly claims that were being filed prior to lockdowns.
  • Continuing claims increased slightly to just under 3.7 million, but the four-week moving average for those claims is still decreasing. 

Unemployment Claims Hit Another Pandemic Low

The Labor Department announced Thursday that unemployment claims last week fell to 498,000.

Not only does that make this the fourth straight week of declining unemployment claims, but it’s also the first time since the coronavirus pandemic began that weekly claims have fallen below half a million. 

Earlier this week, it was reported that private payrolls climbed by 742,000 last month, marking the fourth-straight monthly climb. Despite that positive news, the official count was somewhat smaller than economists’ projections of 873,000 jobs. 

While those numbers highlight a hopeful trend that the labor market is continuing its journey back to pre-pandemic levels, it’s important to remember that the market still hasn’t reached “normal” yet. Before the pandemic, weekly jobless claims were at around 200,000. 

Continuing Claims 

Continuing unemployment claims were a bit more of a mixed bag over the last week. For example, while those claims rose slightly to just below 3.7 million, there was somewhat of a silver lining since the four-week moving average for those claims is still declining.

The Bureau of Labor Statistics is expected to release nonfarm payrolls Friday, and economists predict it will report nearly 995,000 jobs gained last month. If that prediction holds, the unemployment rate would drop from 6% to 5.8%.

Ending Enhanced Unemployment Benefits

Montana Gov. Greg Gianforte (R) indicated Tuesday that he is seeking to end his state’s federally enhanced unemployment benefits by the end of June amid a “severe workforce shortage.”

“Nearly every sector in our economy faces a labor shortage,” Gianforte said in a statement. “The vast expansion of federal unemployment benefits is now doing more harm than good.”

In its place, Gianforte wants to offer return-to-work bonuses. 

“Choosing to eliminate these critical benefits will have the greatest impact on the most vulnerable,” U.S. Labor Department spokesperson Michael Trupo said in a statement critical of Gianforte’s decision.

Trupo added that the move will force immunocompromised workers, as well as workers with immunocompromised family members, to “make an impossible choice” between their health and finances.

In a similar announcement to Gianforte, Florida Gov. Ron DeSantis (R) said Wednesday that those out of work in his state will soon have to prove that they’re looking for a job to continue receiving benefits. 

“Normally when you’re getting unemployment, the whole idea is that’s temporary, and you need to be looking for work to be able to get off unemployment,” DeSantis said at a news conference. “It was a disaster, so we suspended those job search requirements. I think it’s pretty clear now, we have an abundance of job openings.”

The waived work-search requirement will expire on May 29. 

See what others are saying: (Business Insider) (CNBC) (Yahoo)

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