Markus Andrews

Vice President Kamala Harris is calling for a higher capital gains tax rate, and financial advisors have tips for top earners who could be affected.
The presidential candidate proposed a 28% tax on long-term capital gains, or assets owned for more than one year, for households making more than $1 million annually.
The plan is lower than the 39.6% rate proposed by President Joe Biden for the same group in his fiscal year 2025 budget.

Democratic presidential candidate Vice President Kamala Harris arrives at Portsmouth International Airport in Portsmouth, New Hampshire, Sept. 4, 2024.
Joseph Prezioso | AFP | Getty Images

‘We don’t make any changes until the law has passed’

Currently, investors pay 0%, 15% or 20% for long-term capital gains, plus an extra 3.8% net investment income tax, or NIIT, once modified adjusted gross income, or MAGI, exceeds $200,000 for single filers or $250,000 for married couples filing together. Harris’ plan would also increase the NIIT to 5%, The Wall Street Journal reported Wednesday.

Profitable assets owned for one year or less are subject to regular income tax rates, which will increase after 2025 without action from Congress.

Both Biden’s and Harris’ tax proposals would require congressional approval. But with future control of the Senate and the House uncertain, many financial advisors are monitoring plans before taking action.
“We don’t make any changes until the law has passed,” said certified financial planner and enrolled agent Louis Barajas, who is CEO of International Private Wealth Advisors in Irvine, California.
“I think there are sometimes knee-jerk reactions to some of these proposals,” added Barajas, who is a member of CNBC’s Financial Advisor Council.

Although former President Donald Trump has voiced broad support for tax cuts, he has not outlined a capital gains tax proposal.
The topic was addressed in Project 2025, a “vision for a conservative administration” created by conservative think tank The Heritage Foundation with more than 100 other right-leaning organizations.
Project 2025 called for capital gains and qualified dividends to be levied at 15% for higher earners. The plan would also abolish the NIIT.
Several former Trump officials have been directly affiliated with Project 2025, but Trump has distanced himself from the plan.

Who could be hit with higher capital gains taxes

Biden’s proposed higher capital gains taxes would apply to taxable income of more than $1 million per year, or $500,000 for married couples filing separately, according to the U.S. Department of the Treasury. Those amounts would be indexed for inflation. 
However, the proposed higher capital gains tax could also affect lower earners with a one-time sale of a business or commercial property, experts say. 
“There will be more tax planning, especially for people who are maybe in their 60s and 70s, who have rental properties and want to sell them,” Barajas said. But timing a sale, depending on other income, could affect the bottom line.  
Biden’s higher capital gains rate would apply only to capital earnings above the $1 million threshold. For example, if someone has $1.1 million of taxable income and $200,000 of that is capital gains, they would owe the higher rate on $100,000, according to the Treasury.

“If somebody is over the $1 million, it could easily be from a number of different sources,” such as stock sales and required minimum distributions, said CFP John Chichester Jr., founder and CEO of Chichester Financial Group in Phoenix. He is also a certified public accountant.
But there are several ways to reduce your yearly income and avoid the higher tax rate, such as using capital losses carried over from previous years, he said. As of Sept. 5, the S&P 500 was up more than 16% year to date, but some individual assets could provide tax-loss harvesting opportunities. More

More than any other day, online shopping discounts reach their peak on Fridays, a recent report found.
Here’s how to make the most of the deals while avoiding the pitfalls of “spaving.”

Coupons have come a long way from Sunday circulars. And for consumers stretching to make ends meet, they are as indispensable as ever.
Now, with online codes, browser extensions and money-saving apps, there are more ways to find significant discounts at any time — but how good the deals are still depends on the day.

Overall, Friday is the best day for consumers to save money while shopping online, according to a recent study by SimplyCodes. The site assessed coupon release patterns in marketing emails from 30,000 merchants between March and July.
As payday approaches, there is a notable uptick in coupon activity, especially for women’s clothing, skin care and alcohol, SimplyCodes found.
Roughly 52% of coupon codes are released between Wednesday and Friday, before the weekend lull, when fewer new coupons are sent out. On Friday alone, the number of coupons released jumps 19%.

Beware of ‘spaving’

Whether it’s a “limited-time deal” or “buy one, get one free” or simply free shipping, the couponing opportunities are almost overwhelming.
But the lure of a good deal can also lead to excessive buying habits and high-interest credit card debt if you aren’t careful, said consumer savings expert Andrea Woroch.

In fact, so-called “spaving,” or spending more to save more, is an all-too-common pitfall.

In that case, before you buy, consider whether a deal is really worth it, said Julie Ramhold, a consumer analyst at DealNews.com.
For example, “If you’re ordering a few items that are already on sale and you’re far from reaching a free shipping threshold, it might be worth using a coupon code to drop the shipping cost to something like $1.99 rather than filling your cart with more items to get ‘free’ shipping — this way you’re still spending less overall,” Ramhold said.
“At the same time, if you’re stocking up and have a coupon for 25% off your total purchase, it’s probably not worth becoming preoccupied with getting free shipping if the overall savings on your items make the shipping costs negligible,” she added.

How to make the most of a deal, without spaving

If you are planning a big purchase — or any purchase at all — sign up for a store e-newsletter and mobile alerts, or follow brands and stores on social media to get a coupon for in-store or online savings, Woroch advised.
A price-tracking browser extension such as CamelCamelCamel or Keepa can also help you keep an eye on price changes and alert you when a price drops.
Then, save even more by applying a coupon on top of an already discounted item. “Some stores even let you use more than one coupon on the same order. This could be a coupon for money off, free shipping or a free gift with purchase,” Woroch said.
You can search for coupons by store name to find deals quickly using a deal aggregator like CouponCabin.com or RetailMeNot.
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However, it is also important to avoid the temptation to overspend, Woroch cautioned.
If store emails and texts prompt you to shop when you otherwise would not, it may be best to quiet the noise altogether. “Delete shopping apps on your phone that alert you to the latest sale and unsubscribe from store newsletters,” she said.
“Instead, look for coupons only when you need them” with a browser plug-in such as SideKick, which scans for applicable codes, Woroch advised.
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Traders work on the floor of the New York Stock Exchange during afternoon trading on September 05, 2024 in New York City.
Michael M. Santiago | Getty Images

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Here’s what CNBC TV’s producers were watching as the S&P 500 posted its third straight losing day and what’s on the radar for the next session.

The jobs report

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The U.S. 10-year yield in 2024

The airlines

It was a big day for some of the airlines. We’ll be watching to see if optimism from JetBlue will carry through.
JetBlue was up 7% Thursday as it hiked revenue expectations.
After hours, the stock picked up another 1% as the company’s third largest shareholder, Vladimir Galkin bought more shares.
JetBlue is 29% from the 52-week high hit back in in April. Shares remain under $6 apiece.
United Airlines picked up 2% on Thursday. The stock is 20% from the May high.
American Airlines was up 1.6%. It is 33% from the March high.
Delta Air Lines closed 0.5% lower Thursday. The stock is 22% from the May high.

The truckers and transports

CNBC TV’s Frank Holland, anchor of “Worldwide Exchange” and our transports beat reporter, noted there were big losses across the board Thursday due to recent negative trends in the industry.
J.B. Hunt Transport Services fell 2% Thursday. It is 23% from the February high.
Knight-Swift Transportation tumbled 3.3% Thursday. It is down 17% from the February high.
Werner Enterprises dropped 2.4%. The stock is 16% from the December high.
Landstar lost about 2%. The stock is 10% from the December high.
Saia slid 4.5% Thursday. The stock is down 36% from the March high.
Schneider National lost nearly 2%. The stock is 8% from the September 2023 high.
XPO fell 9.6% Thursday. The stock is 21% from the April high.
Old Dominion closed lower by roughly 5%. Shares are 18% below the April high.

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XPO’s YTD performance

Berkshire Hathaway and the 9-day win streak

Berkshire’s winning run came to an end on Thursday.
From Aug. 21’s close — the day before Berkshire’s win streak began — through Sept. 5, the company’s B-shares gained 4.1%. That includes Thursday’s decline. 
One A-share will cost you $696,160. The B-shares are valued at $464.92 apiece.

Roblox

Roblox CEO David Baszucki will be on “Closing Bell: Overtime” at 4 p.m. Friday.
The stock behind this popular gaming company was at $134 a share in the winter of 2021.
Roblox shares ended Thursday’s trading at $43.71. The stock is 7.4% from the December high. More

Payscale’s recent college salary report found that petroleum engineering is currently the highest-paying major overall.
In general, STEM majors — science, technology, engineering and math — consistently rank the highest among the most financially rewarding college degrees. 

College still pays off, but the return on investment largely depends on your choice of major.
College graduates earn 37% more than those with only a high school diploma, according to a new report by Payscale. But as the cost of a degree rises, it is increasingly important to consider both your area of concentration and future earnings potential before taking out student loans to pay for college, most experts say.

Often, a good rule of thumb is not to borrow more than you expect to earn as a starting salary.
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“The fact remains that a college degree significantly impacts earning power,” said Amy Stewart, Payscale’s principal of research and insights.
“Choosing a school or major with strong income potential could cut your student loan repayment time in half, so it’s crucial to consider all your options — particularly for those who are on the fence about the value of a formal education.”
To that end, Payscale ranked which majors are the most financially rewarding, after accounting for salaries at the entry level and median income years down the road.

Highest-earning bachelor’s degrees

Students who pursue a major specifically in science, technology, engineering or math — collectively known as STEM disciplines — are projected to earn the most overall, Payscale’s college salary report found.

Arrows pointing outwards

For the second year in a row, petroleum engineering holds the top spot for highest-paying bachelor’s degrees in 2024. Graduates in the field earn just shy of figures starting out and more than $200,000 with 10 or more years of experience.
After petroleum engineering, operations research and industrial engineering followed by electrical engineering and computer science are the next highest-paying majors, overall, both with higher starting salaries — over $100,000 — but lower mid-career pay.
Payscale’s college salary report is based on alumni salary data from 3.1 million respondents nationwide.  
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Harris in August endorsed the tax increases proposed by President Joe Biden in his fiscal year 2025 budget. One of the proposals is a 25% minimum tax on total income, including so-called “unrealized gains,” or asset growth, exceeding $100 million. This is known as the billionaire minimum tax.
If that provision is enacted, taxpayers with wealth above the $100 million threshold would have to report unrealized gains for each asset class annually, including the basis, or original purchase price, and market value as of Dec. 31. They would also report total liabilities.
However, the plan has failed to gain broad congressional support and could face administrative challenges, policy experts say.

Democratic presidential candidate Vice President Kamala Harris speaks at a campaign rally at Enmarket Arena during a two-day campaign bus tour in Savannah, Georgia, Aug. 29, 2024.
Saul Loeb | AFP | Getty Images

As Vice President Kamala Harris outlines her economic agenda, the Democratic presidential nominee has called for higher taxes on wealthy Americans and corporations — although experts say one of her plans is unlikely to gain traction. 
Harris in August endorsed the tax increases proposed by President Joe Biden in his fiscal year 2025 budget.  One of the proposals is a 25% minimum tax on total income, including so-called “unrealized gains,” or asset growth, exceeding $100 million. This is known as the billionaire minimum tax.

As of June 2023, there were 10,660 centi-millionaires, or people with at least $100 million in assets, living in the U.S., according to a report from Henley & Partners, a wealth and migration advisory firm. The report used data from New World Wealth.
“It’s just not right that those who can most afford it are often paying a lower tax rate than our teachers and our nurses and our firefighters,” Harris said at a campaign event Wednesday in New Hampshire. “That’s why I support a billionaire minimum tax and corporations paying their fair share.”  
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If the billionaire minimum tax is enacted, taxpayers with wealth above the $100 million threshold would have to report unrealized gains for each asset class annually, including the basis, or original purchase price, and market value as of Dec. 31, according to the U.S. Department of the Treasury. They would also report total liabilities.
Currently, investors incur capital gains taxes of 0%, 15% or 20% after selling a profitable asset owned for more than one year. Plus, there’s an extra 3.8% net investment income tax for higher earners.

Biden has called for a billionaire minimum tax in his 2025, 2024 and 2023 fiscal year budgets, and Senate Democrats pushed for a similar levy in October 2021. But the proposals have failed to gain traction.
“There’s very little political support for this,” said Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center.
The Harris campaign did not provide a comment to CNBC.
There’s also been pushback from the business community. Billionaire entrepreneur Mark Cuban on Thursday told CNBC’s “Squawk Box” that he doesn’t think Harris would tax unrealized gains.
“Every conversation I’ve had is that it’s not going to happen,” he said.
“If you tax unrealized gains, you’re going to kill the stock market,” he added.

Billionaire minimum tax is an ‘unworkable proposal’

While many Americans favor higher taxes on the wealthy, policy experts have criticized components of Biden’s proposed billionaire minimum tax.
“It moves in the opposite direction of sound tax policy,” said Erica York, senior economist and research manager with the Tax Foundation’s Center for Federal Tax Policy.
The policy “poses significant administrative and compliance challenges,” including liquidity concerns, possible gaming and IRS disputes, she said. “I still think it ends up being an unworkable proposal.”

Rosenthal offered a similar critique of the proposal, including possible legal challenges, particularly after a June Supreme Court ruling.
Although the justices didn’t comment directly on wealth taxes, the ruling left questions about whether a future wealth tax could pass constitutional muster.

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A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 4, 2024.
Brendan Mcdermid | Reuters

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Here’s what CNBC TV’s producers were watching during the rebound and what’s on the radar for the next session.

Broadcom

The tech giant reports Thursday after the bell. CNBC TV’s Seema Mody will cover it all.
Broadcom is the third biggest component in the popular VanEck Semiconductor ETF (SMH), accounting for 8.6% of the fund. Taiwan Semiconductor Manufacturing and Nvidia make up a greater portion of the ETF’s net assets.
The stock is up about 16% over the past three months.
Shares are 17% from the June high.
The SMH is 20% from its July high. The fund is down 12% in three months.
Broadcom is the third best performer in the SMH this year. Shares are up 38% in 2024.

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Broadcom shares in 2024

Ford August sales

CNBC TV’s auto and airlines man Phil LeBeau will watch for Ford’s August sales in the 9 a.m. hour, Eastern time.
Ford is up nearly 13% in a month.
The stock is 26% from the July 18th high.
General Motors shares are up 21% in a month. They are 4% from the July 18th high.

Costco Wholesale

Shares of Costco are up about 8.3% in a month.
The retailer reports August sales Thursday afternoon
Costco is near the top of the food chain in the S&P Food and Retailing Industry so far this year. Shares are up 35% in 2024. Walmart is tops, with a 47% gain this year.
Jim Cramer is a big fan and last bought Costco for his charitable trust on June 15, 2020. The stock is up 205% since then. It’s up three times as much as the S&P 500 in the same period. 

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Costco shares in 2024

Asset-backed securities

The S&P 500 low volatility ETF More

Seven Republican-led states have sued the U.S. Department of Education to block the Biden administration from carrying out its sweeping new student loan forgiveness plan.
In the lawsuit, the states — Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota and Ohio — say the department’s new effort to forgive student debt, like its previous attempts, which were blocked by the courts, is illegal.
It also claims the department already instructed its loan servicers to begin canceling the eligible loans as early as Sept. 3, which would violate timing restrictions around the rulemaking process.

The U.S. Department of Education in Washington, D.C.
Caroline Brehman | CQ-Roll Call, Inc. | Getty Images

Seven Republican-led states have sued the U.S. Department of Education to block the Biden administration from carrying out its sweeping new student loan forgiveness plan.
In the lawsuit, the states — Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota and Ohio — say the department’s new effort to forgive student debt, like its previous attempts, which were blocked by the courts, is illegal.

The states accuse the Biden administration of trying to “unlawfully … mass cancel hundreds of billions of dollars of loans” without approval from Congress and allege that the Education Department already instructed its loan servicers to begin canceling the eligible loans as early as Sept. 3, which would violate timing restrictions around the rulemaking process.
The Education Department is expected to publish the final rule on its debt relief sometime in October. The states say they “just uncovered documents” showing the department could act sooner, skirting federal regulations.
A spokesperson for the Education Department declined to comment on the pending litigation.
“But we will continue to fight for borrowers across the country who are struggling to repay their federal student loans,” they said.
There is debate over what the exact costs of the new debt relief plan will be, but one estimate puts its price tag at around $147 billion, rather than the hundreds of billons of dollars alleged by the states.

The lawsuit is the latest attempt by Republicans to prevent President Joe Biden from reducing or eliminating people’s student loan balances. Experts have predicted that Biden could try to deliver the relief to tens of millions of Americans just weeks before the election.
The Biden administration began working on its do-over student loan forgiveness plan after the Supreme Court blocked its first policy in June 2023. The revised relief plan targets four groups of borrowers, including those who owe more than they originally borrowed and graduates of low-value programs. Some 25 million people could benefit.
Its new affordable repayment plan, known as SAVE, is also on hold amid a slew of legal challenges. SAVE comes with two key provisions that lawsuits have targeted: It has lower monthly payments than any other federal student loan repayment plan, and it leads to quicker debt forgiveness for those with small balances. More

Cooper Union for the Advancement of Science, in the heart of New York City, is returning to full-tuition scholarships for all graduating seniors over the next four years.
The college is working its way back to providing free tuition for every student — a promise it was founded on.

Cooper Union’s Foundational Building, left, and 41 Cooper Square facility, right, in New York’s Greenwich Village.
Image source: Mario Morgado

In a move years in the making, the Cooper Union for the Advancement of Science announced Tuesday a return to full-tuition scholarships for all graduating seniors.
The New York City-based private college, founded in 1859, had long been tuition-free for all grade levels. But in 2014 it dialed back its longtime commitment that education be “as free as air and water” and began offering students only half-tuition scholarships.

A few years later, the school presented a 10-year plan to restore full-tuition scholarships through saving, cost cutting and fundraising. Now roughly half of the student body attends tuition-free, and, on average, undergraduates pay less than 15% of the college’s $44,550 tuition, according to the school. There are currently 891 undergraduate students enrolled, including 228 seniors.
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“In 2018, we began an ambitious journey to provide full-tuition scholarships for all of our undergraduate students,” outgoing school President Laura Sparks said in a statement. “Thanks to the generosity of three extraordinary alumni donors, we are removing a major financial burden for our graduating classes and reaffirming the ideals that have been foundational to this institution since Peter Cooper opened its doors in 1859.” (Cooper was an industrialist and philanthropist who, before founding Cooper Union, also invented the first American steam train in 1829.)
Current seniors will receive refunds for any tuition payments made for the fall semester and will not have to pay for the spring semester. First-, second- and third-year students will receive full-tuition scholarships in their senior years, according to the school.
“Cooper has long been a leader in full-tuition scholarships for all students, dating back to its founding,” said Robert Franek, editor-in-chief of The Princeton Review. “This decision is a massive step forward to fulfilling that goal.”

Colleges and universities are struggling

When Cooper Union began offering students only half-tuition scholarships, there was an initial drop in applicants. The decline in total applications and increase in the number of students admitted caused the acceptance rate to jump to 14.4% that year, up from 7.7% a year earlier. Currently, the college has an acceptance rate of 12%.
Other schools, too, have been under pressure from declining enrollment. Not only are fewer students interested in pursuing any sort of degree after high school, but the population of college-age students is also shrinking, a trend referred to as the “enrollment cliff.”

Steadily, college is becoming a path for only those with the means to pay for it outright, other reports also show. The rising cost and ballooning student loan balances have become a massive burden for undergraduates and their families, resulting in a college affordability crisis across the board.
As a result, many colleges and universities are struggling amid fewer students and declining tuition revenue, according to Colin Hatton, senior consultant of NEPC’s endowments and foundations team.
“The higher educational system is under stress,” Hatton told CNBC earlier this year.

Making college affordable could help

To stay competitive, some institutions are trying to make college more accessible, in part by eliminating education debt from the outset. 
Such efforts could likely result in more students applying, which can also boost a college’s yield — or the percent of students who choose to enroll after being admitted — which is an important statistic for schools, according to Franek. It could also help the bottom line.

Meanwhile, New York state has been trying to get more graduating high school seniors interested in attending the state’s public colleges through automatic acceptance letters and its own free-tuition program.
The Excelsior Scholarship applies to all schools at City University of New York and State University of New York. It was the first in the nation to cover four years of tuition without being tethered to academic performance, although research shows only a fraction of eligible students are Excelsior recipients.
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