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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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Over half of Tiger 21’s members don’t invest in Nvidia, according to a recent asset allocation report released by the network of ultra high net worth investors and entrepreneurs.
Of the 43% members who have invested in Nvidia, most do not intend to add more stock, amid worries that its has already run up too high.
Nvidia shares slumped 9.5% overnight, wiping about $280 billion of its market cap, amid a broad sell-off in U.S. markets.

Sopa Images | Lightrocket | Getty Images

More than half of Tiger 21’s members don’t invest in Nvidia, according to a recent asset allocation report released by this network of ultra-high-net-worth investors and entrepreneurs.
The network’s second-quarter asset allocation report revealed that 57% of its members are not invested in chip darling Nvidia, with a bulk of the members who have chosen to stay away from the stock saying they do not intend to start a position in the company.

“While Nvidia is the undisputed leader in AI at the moment, no company’s growth lasts forever, and competitors often catch up, leading to a recalibration of the market,” said Michael Sonnenfeldt, chairman of the ultra-rich club. Its members’ personal assets are collectively worth over $165 billion, according to data provided by Sonnenfeldt.
Members of the group, which was set up in 1999 by Sonnenfeldt, share advice with each other on wealth preservation, investments and philanthropic endeavors.

Tiger 21 has 123 groups in 53 markets. The network has over 1,450 members.
Of the 43% members who have invested in Nvidia, most do not intend to add more stock, amid worries that it has already run up too high.
Those fears appear to have been well-founded with Nvidia’s stock tanking 9.5% overnight, wiping about $280 billion of its market cap, amid a broad sell-off in U.S. markets.

A sizable 43% of the club’s members surveyed also expect Nvidia’s success to not last the next decade.
Some members have chosen to avoid technology altogether, and hence there’s no Nvidia in their portfolio, preferring real estate or other sectors, said Sonnenfeldt.
“For others, it is due to the nature of tech investing today. Tiger 21 members watched Tesla rise only to now have almost all major auto manufacturers offer an EV, so while Nvidia is the leader today, some Tiger 21 members believe it is only a matter of time before the competition catches up,” he said.
Sonnenfeldt also said that the club’s members are more focused on preserving wealth rather than chasing high returns.
“They could be avoiding Nvidia due to its volatility and the risks associated with tech investments, despite its impressive growth,” he said.
Nvidia, which has been dubbed as ‘the world’s most important stock,’ rode the artificial intelligence boom to a $3 trillion market cap earlier this year, surging almost nine-fold since the end of 2022. 
The company’s meteoric growth, however, stalled a bit this summer. On Aug. 7, the stock tumbled about 27% to trade below its all-time high hit in June.
Nvidia led semiconductor stocks lower amid a sell-off on Wall Street on Tuesday, with shares continuing their slide in extended trading, down 2%.
Sonnenfeldt is optimistic about the wider AI industry though. “The potential of AI seems to be one of — if not the — most investible themes in all of financial history,” said Sonnenfeldt.
According to Tiger 21’s recent member allocation report, the bulk of its members’ allocation is in private equity, at 28%. Real estate takes up 26% of members’ portfolios in spite of high interest rates, while public equities make up 22% of their asset allocation. More

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., August 30, 2024. 
Brendan McDermid | Reuters

Stocks @ Night is a daily newsletter delivered after hours, giving you a first look at tomorrow and last look at today. Sign up for free to receive it directly in your inbox.
Here’s what CNBC TV’s producers were watching as the three major averages started September on a losing note, and what’s on the radar for the next session.

Nvidia

On Tuesday, Nvidia lost more market value than any other stock in a single day: $279 billion. That’s a big number. CNBC’s man at the NYSE Bob Pisani notes this is the fifth time the stock has lost more than $200 billion in market cap in a single day, but Tuesday’s action takes the cake.
The stock lost 9.5%.
It is now down 23.3% since June 20. It is up, however, 118% in 2024.
The stock is down another 2% after hours. The action comes after Bloomberg reported that the Department of Justice is taking a closer look at antitrust concerns for Nvidia.

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Nvidia’s performance in the past five days

VanEck Semiconductor ETF

Dividend stocks

This part of the market held up OK on Tuesday. The SPDR S&P Dividend ETF (SDY) fell 0.4% on Tuesday, and hit a 52-week high early in the session.
Some might call the dividend yield on this ETF low. It’s 2.4% as of Tuesday night.

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SPDR S&P Dividend ETF (SDY) one-day performance

Utilities

The S&P Utilities Sector finished flat on Tuesday, but it hit a new 52-week high earlier in the day.
The sector is paying a 3% dividend, as of Tuesday’s close.
When interest rates go down, some investors look to utilities which generally pay a decent dividend.
If you look at the utilities sector going back to March 2022 — as rates started to rise — it is up 7% since then.
The Relative Strength Index of the sector is 71. Some traders might think this reading suggests the utilities sector is overbought, but it doesn’t necessarily mean that it’s guaranteed to fall.
In the last month, NRG Energy is the sector’s top performer. It’s up 14% in that period.
PG&E is up 8.3% in a month.
Constellation Energy is up 6.4% in a month.
At the bottom of the pile: American Water Works is off 2.6% in the past month, while AES is down 2.2%. Evergy is down nearly 0.8% in a month.

Mortgage applications

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Champion Homes in the past month

Big Oil

The S&P Energy sector was a bit of a downer Tuesday, losing 2.4%. It is now 9.4% from the April high.
APA was the biggest drag, down 6% on Tuesday. 
EOG Resources and Halliburton were down 4% in the session.
Exxon Mobil dropped 2.1% during the day. Chevron fell 2.2% and ConocoPhillips fell 3.46%.
CNBC’s Pippa Stevens will pick up coverage on Wednesday.
Brent and WTI are both down 4% in a month.
The S&P Energy sector is flat in that same time period.
Oneok and Targa are up 15% in a month. Williams Companies is up 8% in that time.
APA, Halliburton and SLB are the laggards: All three are down about 6% in a month.

Ahead of the NFL

CNBC’s Contessa Brewer will look at the gambling stocks on Wednesday as we close in on the first game of the football season.
The Kansas City Chiefs play the Baltimore Ravens on Thursday at 7 p.m. ET on NBC and Peacock.
DraftKings is down 22% since Feb. 12, the day after the Super Bowl. The stock is down 32% from the March high.
Flutter is 3% in the same time period. The stock is 9% from the March high.
MGM Resorts is down 22% since then. Caesars Entertainment is down 19% in that time period. MGM is 25% from the April high, and Caesars is down 35% from the September high.
By the way, on Thursday’s “Squawk Box,” CNBC will release a much-awaited list of how much NFL teams are worth. Don’t miss it. It’s going to be big.

Dollar Tree reports

The report comes out before the bell Wednesday morning.
Dollar General reported last week, and it wasn’t pretty.
Dollar General shares tanked after the company issued its results last Thursday. The stock was up 1% Tuesday, but it’s still down about 33% in a week.
Dollar Tree is 45% from the March high. Shares are down 14% in a week. More

Many younger retirees rely on Marketplace health insurance before age 65, which has lower monthly premiums thanks to boosted tax breaks through 2025.
But retirees can face a “phantom tax” without proper planning, according to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo.
Boosting income via earlier Social Security payments or Roth individual retirement account conversions could phase out Marketplace tax credits.

Hero Images | Getty Images

Since most Americans aren’t eligible for Medicare before age 65, many younger retirees rely on Marketplace health insurance, which offers lower monthly premiums through the end of 2025 thanks to boosted tax breaks. But retirees can face a costly tax surprise without proper planning, experts say.
As of open enrollment 2024, more than 5.1 million Americans aged 55 to 64 had Marketplace coverage, up from roughly 3.4 million in 2021, according to data from the Kaiser Family Foundation.

In 2021, Congress temporarily enhanced the premium tax credit, which allows Marketplace enrollees to lower monthly premiums upfront or claim the tax break when filing their return. The legislation covered 2021 and 2022, but lawmakers extended that benefit through 2025.  
With Marketplace benefits tied to earnings, younger retirees can leverage lower premiums after leaving the workforce. But some are subject to a “phantom tax” when income rises, according to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.
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“These are very valuable credits,” and several financial moves in retirement could impact them, Lucas warned. “You have to be extremely careful.”

How the premium tax credit works

Before 2021, households with income between 100% and 400% of the federal poverty level were eligible for the premium tax credit. But the American Rescue Plan Act temporarily removed those limits and capped premiums at 8.5% of income amid the pandemic.

Calculating premium tax credit eligibility can be complicated. It’s based on the difference between a benchmark premium — the cost of the second-lowest-cost silver plan available in an area — and a maximum contribution based on a percentage of income. 

Plus, “changes in reporting circumstances should be reported immediately,” to make necessary adjustments, said CFP Jim Guarino, managing director at Baker Newman Noyes in Woburn, Massachusetts.
Otherwise, you could overpay or underpay your Marketplace premiums, which are ultimately reconciled on your tax return, he added.   

Common premium tax credit issues 

Depending on income, the premium tax credit can save eligible younger retirees hundreds or even thousands per year. But higher income can phase out eligibility, experts say.  
“The big one,” in terms of affecting eligibility, is claiming Social Security at age 62 because your entire payment, including the nontaxable portion, counts toward the eligibility calculation for the premium tax credit, Lucas said.  
If you’re claiming the premium tax credit, long-term projections show it’s generally better to wait until at least age 65 to claim Social Security, he said.

The same issue can occur when boosting income via so-called Roth individual retirement account conversions, which transfer pretax or nondeductible IRA funds to a Roth IRA for future tax-free growth.
But with several years until required minimum distributions, you could still implement the strategy later, Lucas said.  
“The name of the game, ultimately, is paying minimum taxes, not just in one year or two years, but over your projected lifespan,” he added.  More

President Joe Biden may try to forgive student debt again as early as next month, in a sweeping redo effort that could impact tens of millions of Americans.
The relief package is almost certain to face legal challenges.

President Joe Biden announces a new plan for federal student loan relief at Madison Area Technical College Truax Campus, in Madison, Wisconsin, on April 8, 2024.
Kevin Lamarque | Reuters

President Joe Biden may try to forgive student debt again as early as next month, in a sweeping redo effort that could impact tens of millions of Americans.
The Biden administration’s attempt to deliver the aid could come roughly 14 months after the Supreme Court blocked it from carrying out its first student loan forgiveness plan. Just hours after the justices announced their ruling in June 2023, Biden vowed to find a new way to reduce or eliminate people’s education debt.

Despite the Republican-led legal challenges that have so far stymied the president from implementing wide-scale student loan relief, his administration has still managed to cancel more of the debt than any other before it.
Mainly through fixes to long-troubled loan relief initiatives, the Biden administration has now approved nearly $169 billion in loan forgiveness for roughly 4.8 million people.
Its new plan is expected to reach at least 25 million more people.

Relief could come as soon as next month

4 groups of borrowers expected to qualify

With the hope that this aid package survives the inevitable next round of legal challenges, the Education Department revised its forgiveness plan to be more targeted than its first.
In its email to borrowers, the department lists four categories of eligibility. Those are:

Borrowers who owe more than they did at the start of repayment.
Those who entered repayment on their undergraduate loans on or before July 1, 2005, or, if they have graduate loans, on or before July 1, 2000.
People who are already eligible for student loan forgiveness under one of the government’s existing programs but just haven’t yet applied.
Students from “low-financial value” programs.

Republicans may try again to stop relief plan

For critics of broad student loan forgiveness, Biden’s new plan looks a lot like his first.
After Biden touted his revised relief program, Missouri Attorney General Andrew Bailey, a Republican, wrote on X that the president “is trying to unabashedly eclipse the Constitution.”
“See you in court,” Bailey wrote.
Missouri was one of the six Republican-led states — along with Arkansas, Iowa, Kansas, Nebraska and South Carolina — to bring a lawsuit against Biden’s first sweeping debt relief effort.

The red states argued that the president overstepped his authority, and that debt cancellation would hurt the bottom lines of lenders. The six conservative Supreme Court justices agreed with them.
Once the Biden administration publishes its new student loan forgiveness plan in October, more legal challenges are inevitable, Kantrowitz said.
“Lawsuits seeking to block the final rule will follow soon after it is published,” he said.
A recent Supreme Court ruling could also make it harder for Biden’s revised plan to survive those broadsides.
The high court in late June overruled the so-called Chevron Doctrine, a 40-year-old precedent that required judges to defer to a federal agency’s interpretation of disputed laws. The 6-3 ruling, which split the conservative-majority court along ideological lines, is expected to undermine the federal government’s regulatory power. More