A Weekend to Remember — the Biden Gaffe Plus Tax Hikes are Back on the Table
March 28, 2022
THE UKRAINIAN GAFFE: Biden was lambasted last August for the inept U.S. pullout from Afghanistan, and public opinion has embraced a view that he hasn’t acted quickly enough to support Ukraine. Thus his speech on Saturday in Poland, ripping Vladimir Putin, showed plenty of testosterone.
PERHAPS SOMEDAY THE ADDRESS may be viewed as similar to Ronald Reagan’s “tear down this wall” speech in Berlin in 1987. But Biden’s ad lib that Putin “cannot stay in power” was instantly walked back by the White House, where aides had painstakingly won NATO unity.
U.S. ALLIES WERE ANGRY AND BLINDSIDED by Biden’s assertion, just as they were blindsided on Afghanistan, and by four years of enduring Donald Trump’s erratic behavior. And Russia now can claim that the West wants to remove Putin. Did Biden’s unscripted remarks show resolve or did he simply reinforce growing doubts about his mental acuity?
IN THE MEANTIME, THE MOST ENCOURAGING STORY of the weekend was the apparent decision by Russia not to focus on capturing Kyiv, a battle that Moscow can’t win. Russian troops — from generals to conscripts — are in retreat in much of the country.
BUT THE SHELLING CONTINUES in many cities, as Mariupol faces a grave humanitarian crisis; Volodymyr Zelensky will have to compromise. A deal, brokered by Turkey, is coming into focus; it would give much of eastern Ukraine to the Russians while abandoning a goal of NATO membership for Ukraine.
ZELENSKY ALSO HAS TO WORRY ABOUT PUBLIC OPINION: The terms of a possible deal may spare Kyiv and other cities from obliteration, but considering the sacrifice by the Ukrainian people, the terms of this deal may be a bitter pill for them to swallow.
EVEN PUTIN HAS TO WORRY about public opinion, as the death toll soars for Russian troops — and generals — and the Russian economy spirals downward. He can’t jail all the dissidents in Moscow.
AN UNSATISFACTORY DEAL for all parties seems likely, although we don’t rule out a rout on the battlefield, as Russians quickly retreat from the Kyiv region. But Zelensky doesn’t have the weapons he needs; Biden’s rhetoric doesn’t match his policies on arming the Ukrainians.
A PARTITIONED UKRAINE seems likely, sparing Kyiv, with a guerrilla war persisting indefinitely — as all parties ask increasingly relevant questions: are U.S. officials on the same page? Or are they skittishly reacting to opinion polls on everything from gasoline prices to regime change?
* * * * *
WITH BIDEN’S JOB APPROVAL barely at 40% positive, the White House needs a diversion, so tax hikes on very wealthy Americans are back on the table. This also is poll-tested — the public wants to tax the rich; even a majority of Republicans think the uber-wealthy don’t pay enough taxes.
SO THE 2023 BUDGET PROPOSAL, out today, will call for a 20% minimum tax rate on families worth more than $100 million. The well-polled title of this plan is the “Billionaire’s Minimum Income Tax.” Significantly, it would contain a tax on unrealized gains; even some Democrats are leery of what would be labeled as a “wealth tax.”
THIS COMES AS SEN. JOE MANCHIN indicates a willingness to compromise, but a tax hike as the economy slows will be an uphill fight. And there’s no indication that Democratic Sen. Kyrsten Sinema will go along; she opposes any new taxes — and she could single-handedly kill this proposal in the 50-50 Senate.
BUT IT’S A CAMPAIGN ISSUE: Even if the White House can’t get this enacted, Democrats have something to stir the party’s base this fall. But the revenue allegedly raised would be $360 billion over ten years, a relative pittance in this era of trillion dollar deficits.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2022 AGF Management Limited. All rights reserved.