Biden’s Tax Plan is Already in Trouble; Canada’s Export Boom

Insights and Market Perspectives

IT DIDN’T TAKE LONG for President Biden’s latest tax plan to crash and burn. His nemesis, Democratic Sen. Joe Manchin, stated yesterday that he would not support the “billionaire’s tax hike,” effectively killing it in the 50-50 Senate.

JUST ONE “NO” DEMOCRATIC VOTE from either Manchin or Sen. Kyrsten Sinema (Ariz.) — both maverick centrists — would kill the Biden tax plan. Manchin has indicated he could support for some type of tax hike on very wealthy individuals and highly profitable companies, but passing any tax bill this year will be a long slog.

A MAJOR OBJECTION by all Republicans and a few Democrats is that this Biden proposal would tax unrealized gains — which looks like a “wealth tax” that Elizabeth Warren and other Progressives have attempted (unsuccessfully) to enact. A wealth tax would raise Constitutional issues — “You can’t tax something that’s not earned,” Manchin told The Hill.com yesterday.

[IN A RELATED DEVELOPMENT, Manchin’s detractors got quite a gift on Monday, when the Washington Post ran an exhaustive report on his coal business in West Virginia. There’s no question that Manchin used his position for personal enrichment — which happens frequently, but rarely as blatantly as Manchin’s graft.]* * * * *
THE UKRAINIAN WAR HAS A CLEAR BENEFICIARY — CANADA: Check out the article in this morning’s Wall Street Journal, which focuses on resource-rich Canada, which is enjoying unprecedented global demand as supplies tighten in Russia and Ukraine for potash, crude oil, uranium, nickel, wheat, etc.

AS THE WORLD FACES growing food and fuel shortages, trade with Canada is likely to rise further, according to the Journal article, even though there are infrastructure challenges in getting many of these goods — especially fossil fuels — out of Canada.

MEANHILE, PEACE TALKS are inching toward a resolution; the biggest roadblock, in our opinion, will be the sanctions, which cannot be turned on and off like a light switch. Vladimir Putin is responsible for killing thousands of people, and he won’t get sanctions lifted quickly even if there’s a truce.

WE CONTINUE TO BELIEVE that the most important developments are on the battlefield, where Russian troops are being routed. Even as Russians continue shelling cities, their ground troops are in disarray and on the defensive; the war criminal Putin will have to sue for peace later in April.

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