Tag: Andrew Duehren

Fitch Downgrades U.S. Credit Rating

Mary Pat Campbell

Link: https://www.wsj.com/articles/fitch-downgrades-u-s-credit-rating-56c73b89?mod=hp_lead_pos1

Excerpt:

Fitch Ratings downgraded the U.S. government’s credit rating weeks after President Biden and congressional Republicans came to the brink of a historic default, warning about the growing debt burden and political dysfunction in Washington.

The downgrade, the first by a major ratings firm in more than a decade, is evidence that increasingly frequent political skirmishes over the U.S. government’s finances are clouding the outlook for the $25 trillion global market for Treasurys. Fitch’s rating on the U.S. now stands at “AA+”, or one notch below the top “AAA” grade.

….

Few investors believe that Fitch’s downgrade will immediately challenge that role. Still, it is the first time a ratings firm lowered its headline assessment of the U.S. government’s propensity to pay its bills on time since Standard & Poor’s in 2011 lowered its rating one notch below the top grade. That decision followed another tense debt-ceiling standoff in Congress.

Moody’s, the other member of the three big U.S. ratings firms, continues to give the U.S. its strongest assessment.

Fitch said Tuesday that the downgrade reflects an “erosion of governance” in the U.S. relative to other top-tier economies over the last two decades.

“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch said.

Author(s): Matt Grossman and Andrew Duehren

Publication Date: 1 Aug 2023

Publication Site: WSJ

Senate Democrats Push for Capital-Gains Tax at Death With $1 Million Exemption

Mary Pat Campbell

Link: https://www.wsj.com/articles/senate-democrats-push-for-capital-gains-tax-at-death-with-1-million-exemption-11617046200?mod=djemwhatsnews

Excerpt:

Progressive Senate Democrats suggested that their new plan to tax unrealized capital gains at death should come with a $1 million per-person exemption, setting that line 10 times higher than an earlier Obama administration proposal and shielding a larger swath of upper income households.

A discussion draft released Monday by Sen. Chris Van Hollen (D., Md.) and others marks a first attempt to put details on an idea that President Biden endorsed during last year’s campaign. Capital-gains taxation is likely to spur significant debate in coming months as Democrats look to raise money from high-income households to pay for Mr. Biden’s proposed spending on infrastructure and social programs.

Under current law, someone who dies with appreciated assets—including homes, businesses and stocks in taxable accounts—doesn’t have to pay capital-gains taxes on that increase. Instead, the heirs have to pay capital-gains taxes only after they sell and only on gains after the original owner’s death. That “stepped-up basis” is a longstanding feature of the tax code, but it has come under increasing attacks from Democrats who see wealthy people’s profits escaping the income tax.

Author(s): Richard Rubin, Andrew Duehren

Publication Date: 29 March 2021

Publication Site: Wall Street Journal