Latest news with #JamesLucier
CNBC
01-07-2025
- Business
- CNBC
The size of Trump's megabill will be the size of the debt, says Capital Alpha's James Lucier
James Lucier, Capital Alpha Partners managing partner, joins 'The Exchange' to discuss the One Big Beautiful Bill and the fiscal impact from it.
Yahoo
28-06-2025
- Business
- Yahoo
Wind, Solar Credits Face Shorter Phase-Out in GOP's New Tax Bill
(Bloomberg) -- Key tax incentives for US wind and solar projects would face a more aggressive phase-out in the Senate's latest version of President Donald Trump's spending package. Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares US Renters Face Storm of Rising Costs Squeezed by Crowds, the Roads of Central Park Are Being Reimagined Sprawl Is Still Not the Answer Mapping the Architectural History of New York's Chinatown The tweak, which follows pushback by Trump on the Inflation Reduction Act credits, would sharply limit the number of solar and wind farms that qualify for incentives, appeasing opponents while risking the ire of moderate members who argued for a slower phase-out. Under the new version of the $4.2 trillion tax and spending package released late Friday, wind and solar projects would need to be up and running by the end of 2027 to receive a pair of lucrative incentives for clean energy production. The initial version released by the Senate's tax-writing committee simply required projects to start construction by the end of 2025 to get the incentives' full value. 'This is a huge problem for wind and solar developers, who thought they would have at least four years to finish projects that started in 2025,' said James Lucier, managing director at research group Capital Alpha Partners. If it becomes law, the change could be a blow to companies such as NextEra Energy Inc., the biggest US developer of wind and solar projects, which has an inventory of projects that qualified as starting construction in 2025, Lucier said. The legislation also adds a new excise tax on renewable projects that don't meet strict restrictions against the use of Chinese materials, as well as adds the production of coal used in steel making to an existing tax credit for clean energy technology such as wind turbines and solar panels. In contrast, it doesn't include a rescue for rooftop solar leasing companies, like Sunrun Inc., that would see key incentives ended early. 'Any senator who votes for this bill is voting for higher energy prices, a weaker economy, and a less secure America,' the Solar Energy Industries Association said in a statement. 'And they'll have to answer for it when families open their utility bills, when workers lose their paychecks, and when voters head to the polls.' The bill does include a longer phase-out of a tax credit for hydrogen production used by companies such as Plug Power Inc. While the initial version of the legislation ended the credit after this year, the new version allows it to remain until 2028. Other tweaks made in the new version of the bill includes a quicker end to a popular $7,500 consumer tax credit for electric vehicles. While the earlier proposal would have ended the incentive at the end of this year for most EV sales, the new version terminates the credit after September 30, 2025. Tax credits for the purchase of used and commercial electric vehicles would end at the same time. The tweaks reflect House Republican resistance to the more generous timetables. House Majority Leader Steve Scalise said Thursday the House will need to reverse the Senate's move to extend a slew of clean energy tax credits. 'We had a lot of back and forth over getting that language right to keep it tight,' Scalise said. Trump 'is where we are, if not more aggressive, in getting rid of it,' he said. America's Top Consumer-Sentiment Economist Is Worried How to Steal a House Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push Apple Test-Drives Big-Screen Movie Strategy With F1 Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags ©2025 Bloomberg L.P. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
CNBC
08-06-2025
- Business
- CNBC
What a ‘revenge tax' in Trump's spending bill could mean for investors
As the Senate weighs President Donald Trump's multi-trillion-dollar spending package, a lesser-known provision tucked into the House-approved bill has pushback from Wall Street. The House measure, known as Section 899, would allow the U.S. to add a new tax of up to 20% on foreigners with U.S. investments, including multinational companies operating in the U.S. Some analysts call the provision a "revenge tax" due to its wording. It would apply to foreign entities if their home country imposes "unfair foreign taxes" against U.S. companies, according to the bill. "Wall Street investors are shocked by [Section] 899 and apparently did not see it coming," James Lucier, Capital Alpha Partners managing director, wrote in a June 5 analysis. More from Personal Finance:The average 401(k) savings rate hit a record high. See if you're on trackOn-time debt payments aren't a magic fix for your credit score. Here's whyWith 'above normal' hurricane forecasts, check your home insurance policy If enacted as written, the provision could have "significant implications for the asset management industry," including cross-border income earned by hedge funds, private equity funds and other entities, Ernst & Young wrote on June 2. Passive investment income could be subject to a higher U.S. withholding tax, as high as 50% in some cases, the company noted. Some analysts worry that could impact future investment. The Investment Company Institute, which represents the asset management industry serving individual investors, warned in a May 30 statement that the provision is "written in a manner that could limit foreign investment to the U.S." But with details pending as the Senate assesses the bill, many experts are still weighing the potential impact — including who could be affected. Here's what investors need to know about Section 899. As drafted, Section 899 would allow the U.S. to hike existing levies for countries with "unfair foreign taxes" by 5% per year, capped at 20%. Several kinds of tax fall under "unfair foreign taxes," according to the provision. Those include the undertaxed profits rule, which is associated with part of the global minimum tax negotiated by the Biden administration. The term would also apply to digital services taxes and diverted profits taxes, along with new levies that could arise, according to the bill. The second part of the measure would expand the so-called base erosion and anti-abuse tax, or BEAT, which aims to prevent corporations from shifting profits abroad to avoid taxes. "Basically, all businesses that are operating in the U.S. from a foreign headquarters will face that," said Daniel Bunn, president and CEO of the Tax Foundation. "It's pretty expansive." The retaliatory measures would apply to most wealthy countries from which the U.S. receives direct foreign investment, which could threaten or harm the U.S. economy, according to Bunn's analysis. Notably, the proposed taxes don't apply to U.S. Treasuries or portfolio interest, according to the bill. Section 899 still needs Senate approval, and it's unclear how the provision could change amid alarm from Wall Street. But the measure has "strong support" from others in the business community, and it's a "strong priority" for Republican House Ways and Means Committee members, Capital Alpha Partners' Lucier wrote. House Ways and Means Committee Chairman Jason Smith, R-Mo., first floated the idea in a May 2023 bill, and has been outspoken, along with other Republicans, against the global minimum tax. If enacted as drafted, Section 899 could raise an estimated $116 billion over 10 years, according to the Joint Committee on Taxation. That could help fund other priorities in Trump's mega-bill, and if removed, lawmakers may need to find the revenue elsewhere, Bunn said. However, House Ways and Means Republicans may ultimately want foreign countries to adjust their tax policies before the new tax is imposed. "If these countries withdraw these taxes and decide to behave, we will have achieved our goal," Smith said in a June 4 statement.
Yahoo
30-05-2025
- Business
- Yahoo
Trump's Tariff Empire Under Fire -- Court Ruling Could Flip Global Trade on Its Head
Trump's favorite tariff tool just got slapped down in courtand while the appeals bench hit pause on that decision, the damage could already be done. A federal trade court ruled Trump overstepped by using emergency powers under IEEPA to push broad levies on U.S. allies and rivals. If the ruling sticks, it could roll back two-thirds of those tariffs and sink the effective U.S. tariff rate from nearly 27% to under 6%, according to Bloomberg Economics. That's not just a legal blowit's a blow to the core of Trump's trade leverage heading into election season. The White House isn't out of options, but none of them are quick or clean. Trump could fall back on older laws like Section 232 or 301, which allow for tariffs on national security or unfair trade groundsbut those come with long timelines, more paperwork, and tighter restrictions. Yes, he can pivot, said Capital Alpha's James Lucier. But he's running out of time to make it count before the midterms. Trade advisor Peter Navarro insists the tariff agenda is alive and well, but any new approach will likely take monthsnot daysto materialize. That uncertainty alone could rattle global supply chains that have already been stretched thin. For companies exposed to cross-border tariffs, this isn't just noiseit's strategy-altering. Tesla (NASDAQ:TSLA), which relies heavily on complex global sourcing, could face new cost risks if tariffs return through different legal doors. And industries like steel, autos, and semiconductorssome already caught in prior Section 232 probesmight get pulled back into the spotlight. With a court-imposed June 9 deadline looming and the Supreme Court now in the mix, investors should expect this legal fight to shape not just headlines, but actual trade flows and margin forecasts heading into the second half of 2025. This article first appeared on GuruFocus.
Yahoo
29-05-2025
- Business
- Yahoo
Commentary: Trump's trade war backfires
President Trump started his second term eager to hammer out trade deals with dozens of other nations. He forgot to negotiate with his own judiciary first. Trump's plan to reshape worldwide trade through aggressive use of tariffs is a mess following the unanimous ruling by the US Court of International Trade (CIT) that his rationale for many tariffs is unconstitutional. Trump has imposed most of his tariffs this year by claiming a "national emergency" exists in the form of large and persistent trade deficits that warrant tariffs. Several businesses and other groups sued to block those tariffs, claiming that Trump's use of a 1977 law to justify the tariffs is invalid. On May 28, the CIT agreed. The three-judge panel unanimously blocked all the tariffs Trump has imposed on an emergency basis, which is most of them. The Trump administration has 10 days to stop collecting new import taxes, and it must refund those collected so far. The Trump trade war is far from over. The Trump White House has appealed the court ruling, which will likely end up at the Supreme Court, perhaps quickly. Legal analysts place roughly 50-50 odds on whether the Supreme Court will uphold or overturn the CIT's blockage of the emergency tariffs. If the Supreme Court upholds the decision, Trump still has several other ways of imposing tariffs. Read more: What Trump's tariffs mean for the economy and your wallet Even so, Trump has clearly bungled his effort to strong-arm other nations into making trade concessions while weakening his own future leverage to strike deals. "The damage has been done," James Lucier of Capital Alpha Partners explained in a May 29 analysis. "No trade deals are likely with any country as long as an authoritative court has held not only that the basic policy is unlawful but that its implementation must be terminated immediately. Trump's credibility as a trade negotiator has been badly damaged." There are at least four other legal avenues Trump can use to justify tariffs. Trump took the novel approach of basing his tariffs on the claim of a national emergency because it gave him maximum flexibility. Were the courts to find it legal, Trump could impose any tariff of any amount on any product at any time he chose. The whole reason Trump thinks tariff is "the most beautiful word" is probably that he thinks it gives him unchecked power to micromanage the economy and punish any country, company, or even individual with a custom-made implications, however, border on ridiculous. Very few economists think a trade deficit represents anything close to a "national emergency," since a trade deficit only means that Americans exchange dollars for foreign-made products they want. Before Trump started imposing tariffs, the US economy was arguably the world's most dynamic. It gets sillier still when Trump threatens tariffs on specific products, such as Apple smartphones, because they're not made in the United States, as if building them overseas would let China or India control the phones Americans use. The emergency justification also let Trump bypass a lot of procedural maneuvering that can take months and impose tariffs in real time. Trump recently threatened to impose a 50% tariff on products from Europe, starting June 1, for instance. The emergency justification would have allowed Trump to do that, giving the threat teeth. The courts, for now, have taken that leverage from Trump. The block on emergency tariffs covers Trump's 10% "baseline" tariff on most imports, along with an additional 20% tariff on Chinese imports. It also covers new Trump tariffs on imports from Canada and Mexico. So if the ruling survives appeals, those tariffs will go away, and Trump will not be able to impose any new tariff based on his claim of an emergency. Still in place are a variety of new Trump tariffs imposed under different legal justifications, including a 25% tax on imported cars and car parts, plus steel and aluminum. Trump is also reportedly working on tariffs on imported computer chips and pharmaceuticals, which wouldn't be affected by the ruling on emergency tariffs. If the Supreme Court upholds the ban on emergency tariffs, Trump will, in many ways, have to start over in his quest for widespread tariffs. Other legal avenues may not allow Trump to levy something as wide-ranging as a "baseline" tariff on all imports from everywhere. Tariffs would have to be more targeted, with extensive documentation justifying the need, in order to survive inevitable court challenges. The CIT ruling may also embolden trading partners such as China and Europe that aren't eager to cave to Trump's demands on trade. Those nations are already slow-rolling Trump to some extent by playing coy while Trump contends with the damage tariffs do to his own economy back home. In several cases, Trump has backed down on his most severe tariff threats amid stock market sell-offs, rising interest rates, and other signs of stress in US markets. Traders now dub this the "TACO" trade, as in "Trump Always Chickens Out." Trading partners in Trump's crosshairs now see that Trump can't even persuade courts in his own country to support his tariffs. That will make them far more likely to wait for him to clear legal wickets in his own country before they make any of the concessions Trump is after, such as making it easier to sell US products in foreign markets. The trade war will continue, but the aggressor won't be quite as fearsome. Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman. 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