Top US official voices opposition to global wealth tax

The US stands opposed to a global wealth tax: US Treasury Secretary Janet Yellen has made it clear that the US will not be backing a unified global wealth tax during upcoming G7 ministerial discussions, she told the Wall Street Journal.

There’s a case to be made in favor of such a tax: Officials from Brazil, France, Spain, Germany, and South Africa have been mulling a proposal that would require bn’aires to part with at least 2% of their overall wealth annually, arguing that a global tax would prevent the super-wealthy from shifting their assets to overseas tax havens and help address the widening income inequality.

Yellen thinks otherwise: “We believe in progressive taxation. But the notion of some common global arrangement for taxing b’naires with proceeds redistributed in some way — we’re not supportive of a process to try to achieve that. That’s something we can’t sign on to,” Yellen said.

Where the US currently stands: While the US already taxes its citizens on the global income they earn — which hampers efforts to avoid taxation by moving assets abroad — the concept of an annual tax on an individual’s net worth remains off the table. Meanwhile, the Supreme Court is expected to soon address the constitutionality of wealth taxes — its decision could significantly impact future tax policy in the country.

AND- We’re nearing the end of an era at JPMorgan as Jamie Dimon, 68, “signaled retirement is closer than ever, striking a key change in messaging during the bank’s investor day. “The timetable isn’t five years anymore,” he said, per CNBC.

And for our fellow Finance Bros of a Certain Age™: Ivan Boesky has died at age 87. The American trader came to personify the excesses of arbitrage and insider trade in the 1980s, ultimately pleading guilty to conspiracy charges that signaled the unraveling of the “greed is good” era on Wall Street. Boesky became famous for paying massive sums for inside information that allowed him to structure trades. His case prompted the US securities regulator to properly define insider trading for the first time.

Fast fact: A commencement speech on the power of greed that Boesky delivered became the inspiration for the “greed is good” line attributed to the character Gordon Gecko in Oliver Stone’s Wall Street.

See obituaries in the Financial Times | New York Times | Wall Street Journal.

MARKETS THIS MORNING-

Wall Street cheered Microsoft’s new “AI” PC line, sending the tech-heavy Nasdaq to a record high yesterday, but Asian markets are nonplussed, with all but the Nikkei down in early trading this morning. European and US equities futures were down slightly overnight.

THE CLOSING BELL-

The ADX remained flat yesterday on turnover of AED 1 bn. The index is down 5.6% YTD.

In the green: Gulf Cement (+15%), Emirates Stallions Group (+8.9%) and Adnoc Logistics and Services (+3.8%).

In the red: Ooredoo (-9.3%), National Corporation for Tourism and Hotels (-5.2%) and Hayah Insurance Company (-4.2%).

Over on the DFM, the index also stayed flat, on turnover of AED 405.4 mn. Meanwhile Nasdaq Dubai closed up 0.6%.

CORPORATE ACTIONS-

Orascom Construction approved a dividend payout of USD 0.20 per share for 2023, which will be paid out in August 2024 according to a Nasdaq Dubai disclosure (pdf). The board will determine the record and payment dates in July 2024, with dividends paid in USD to Nasdaq Dubai shareholders and in EGP (based on the USD/EGP exchange rate announced by the Central Bank of Egypt) to Egyptian Exchange shareholders.