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In a significant address at the Economic Club of New York, Republican presidential candidate Donald Trump outlined his economic agenda, promising to reduce the corporate tax rate from 21% to 15% for companies that make their products in the U.S., cut regulations, and audit the federal government. He emphasized his commitment to "low taxes, low regulations, low energy costs, low interest rates, secure borders, [and] low, low, low crime," contrasting his plans with those of his Democratic rival, Kamala Harris. Mr. Trump proposed additional measures to boost domestic manufacturing and corporate research, including immediate writeoffs for capital expenses and an expanded tax credit for research and development. A second Trump administration would also establish a government efficiency commission headed by billionaire supporter Elon Musk, "tasked with conducting a complete financial and performance audit of the entire federal government." "I look forward to serving America if the opportunity arises," the Tesla chief wrote on X on Thursday. "No pay, no title, no recognition is needed."

 

Fox News

Politico

Reuters

Wall Street Journal

Sales tax changes in 2024: What you should know

The sales tax landscape is shifting dramatically, especially for software and digital products. 2024 has already seen a wave of changes: Vermont started taxing SaaS, Texas overhauled their sourcing rules, and the EU introduced some game changing developments.

Not sure what these changes mean for your business? Anrok’s team of tax experts break down everything you should know about this year’s updates in our comprehensive report—plus what to expect for the rest of the year.

[Download the 2024 report]

 

Monish Patolawala, chief financial officer at grain trading group Archer Daniels Midland, says that addressing a "material weakness" in the company's accounting practices involving intersegment reporting is one of his main priorities. Patolawala, formerly the finance chief of industrial product maker 3M, joined the Chicago-based company last month, succeeding Vikram Luthar, who was abruptly placed on administrative leave in January after ADM announced an internal accounting probe. In addition to addressing accounting matters, Patolawala’s early priorities in his new role will include focusing on the company’s operating rigor and smart capital allocation, and leveraging its data. “You visualize the data and then you use lean principles, which is good root cause analysis,” he said at a Barclays conference on Tuesday. “You do problem solving by finding out what the true root cause is, and then you get teams together to create solutions that have sustained value creation.” 

 

CFO Dive

Volkswagen's finance chief, Arno Antlitz, has warned that the core VW brand has "one, maybe two" years to implement significant cost reductions, including potential plant closures in Germany, if the brand is to survive the shift to electric cars. During a meeting with 16,000 workers, he highlighted a shortfall of about 500,000 cars, equivalent to two plants, due to a shrinking market post-pandemic. Works Council chief Daniela Cavallo expressed that management had "massively damaged trust" and urged CEO Oliver Blume to prioritize job security over costly software partnerships. Amidst rising economic challenges in Germany, Labour Minister Hubertus Heil emphasized the need for the company to secure employment while the government considers tax reductions to stimulate demand for electric vehicles. Volkswagen aims for a 6.5% profit margin by 2026, up from 2.3% in the first half of this year, but faces pressure from unions to address plant closure threats before wage negotiations in October.

 

Daily Sabah

Deutsche Welle (EN)

France 24

U.S. Vice President Kamala Harris's proposed corporate tax increase to 28% could reduce earnings for S&P 500 companies by approximately 5%, according to analysts at Goldman Sachs. Harris aims to ensure that "big corporations pay their fair share" if elected against Donald Trump. The analysis suggests that additional taxation on foreign income and raising the alternative minimum tax rate could further decrease earnings by up to 8%. Conversely, Trump's plan to lower the corporate tax rate to 15% from 21% could increase S&P 500 earnings by about 4%, the analysis claims. Goldman Sachs noted that a 1 percentage point change in the U.S. statutory domestic tax rate would affect S&P 500 earnings per share by nearly 1%, equating to about $2. Harris's ascent to the top of the Democratic ticket has revitalized the campaign, with some polls showing her leading Trump.

 

Reuters

Bank of America is providing $205m in exchange for tax credits from an ethanol producer that captures the carbon produced at a plant in North Dakota. It is the first deal of its kind since the 2022 climate law increased the tax credits available for capturing carbon and storing it underground. Harvestone Low Carbon Partners, the company that raised the money, says it started capturing carbon from its plant near Underwood last October. The plant produces corn ethanol that is blended with gasoline to comply with regulations for reducing fuel emissions. “You can only do so much renewables build-out,” commented Noah Zerance, a director on Bank of America’s sustainable finance team. “There has to be an element of trying to address the emitters that are in the market today and helping them decarbonize.” The deal highlights how investors are betting that some parts of the Biden administration’s climate spending will withstand potential policy shifts in Washington. Many of the tax credits are likely to survive in a second Donald Trump term, while grants and loans that are more subject to the whims of the executive branch could be at risk, analysts say.

 

Wall Street Journal

The board of Seven & i Holdings has rejected a near $39bn cash takeover offer from Canada’s Alimentation Couche-Tard, arguing that the $14.86 per share bid “grossly undervalues” the Japanese group and does not reflect regulatory risks over any deal. In a letter to Couche-Tard, Seven & i chair Stephen Dacus wrote: “We are open to engaging in sincere discussions should you put forth a proposal that fully recognises our standalone intrinsic value. However, we do not believe . . . the proposal you have put forward provides a basis for us to engage in substantive discussions". The letter added that even an improved offer would not "adequately acknowledge the multiple and significant challenges such a transaction would face from US competition law enforcement”. On a call with analysts Thursday, Couche-Tard chief executive Alex Miller said the Quebec-based company was “confident” it could complete the takeover, which would create the fourth-biggest retailer in the world after Walmart, Amazon and Costco.

 

Financial Times

The Japan Times

New York Times

The Globe and Mail

The productivity of U.S. workers rose by a revised 2.5% annual rate in the second quarter, according to the Labor Department, up from a previously-reported 2.3% surge. Unit labor costs rose by 0.4% compared to the previously reported 0.9% advance. The upward revision was in line with economists' expectations. Productivity increased at a 0.4% rate in the first quarter, and grew at an unrevised 2.7% pace from a year ago. Unit labor costs - the price of labor per single unit of output - rose at a 0.4% rate in the April-June quarter. Compensation rose at a 3.0% rate last quarter, revised down from the previously estimated 3.3% pace.

 

Market Watch

Nasdaq

Reuters

The Institute for Supply Management (ISM)'s Services PMI for August improved slightly from the previous month, rising 0.1 point to 51.5, and beating an analyst consensus prediction of 51.1. The business activity index dropped from 54.5 to 53.3, offset to an extent by the new orders index, which improved to 53, from 52.4. “The increase in the Services PMI in August is due to all directly factoring indexes (Business Activity, New Orders, Employment and Supplier Deliveries) with readings close to or above 50 percent", the ISM said in a statement. A separate measure, the S&P Global Services PMI, increased from 55 to 55.7. The  S&P Global Composite PMI improved from 54.3 to 54.6, while analysts expected that it would drop to 54.1. Any reading above 50 indicates expansion. 

 

FX Empire

Market Watch

Reuters

The International Longshoremen's Association (ILA) has convened in New Jersey to discuss wage demands amid a looming strike that could disrupt major U.S. ports. Negotiations with the United States Maritime Alliance (USMX) have stalled since June. The union is seeking a nearly 80% wage increase over six years. ILA President Harold Daggett warned: “there's a real chance we won't have a new agreement in place,” indicating a potential strike on October 1, 2024. The National Retail Federation has urged the White House to intervene, saying that a strike would significantly impact retailers and the economy. A work stoppage could lead to substantial shipping delays.

 

Bloomberg

According to CBRE's 11th annual Scoring Tech Talent report, there is a significant demand for technology workers in industries beyond the traditional tech sector, largely driven by the rise of artificial intelligence. For the first time, non-tech industries have hired the majority of tech talent, indicating a shift in hiring trends. The report highlights that "the emergence of artificial intelligence is a big reason why" companies are seeking tech expertise across various fields.

 

The Baltimore Sun

The first legally binding international AI treaty, known as the AI Convention, has been signed by countries including European Union members, the United States, and Britain. The treaty, which has been in development for years, aims to address the risks associated with AI while promoting responsible innovation. Shabana Mahmood, Britain's justice minister, said: "This Convention is a major step to ensuring that these new technologies can be harnessed without eroding our oldest values, like human rights and the rule of law." The AI Convention focuses on protecting the human rights of individuals affected by AI systems and is distinct from the EU AI Act, which regulates AI within the EU internal market. The Council of Europe, an international organization with 47 member countries, initiated the framework for this treaty in 2019.

 

Straits Times

Reuters

Workplace well-being levels mirror those of 2019, the year before COVID hit, according to a report published last week by Johns Hopkins' Carey Business School in partnership with the organization Great Place to Work. The report’s results were generated using a proprietary employee survey known as The Trust Index Survey that was administered to more than 2,500 organizations and more than 1.5 million survey respondents. The data is from 2023, the most recent available. The pandemic "created a very strong employer-employee trust, and that trust became super important," said Richard Smith, director of the Human Capital Development Lab at Johns Hopkins' Carey Business School. "Many of us who did this study thought, 'Well, isn't [the decline in workplace well-being levels] a shame?' Couldn't we have kept that up, in terms of our focus around employees and how they're doing, checking in and focusing on the humanity we created during the crisis? . . . And wouldn't it be great if we could continue that?"

 

Milwaukee Journal Sentinel

Recent actions by companies like Ford and Lowe's to dismantle their diversity, equity, and inclusion (DEI) initiatives have raised concerns about alienating LGBTQ+ employees. According to a survey by the Human Rights Campaign (HRC), nearly 80% of LGBTQ+ respondents indicated they would boycott companies that rolled back DEI policies. Furthermore, 20% stated they would consider quitting if their employer made such changes. The survey highlights that over 72% of participants felt their workplace experience would suffer due to these rollbacks. Despite some companies facing pressure to eliminate DEI programs, the data suggests that LGBTQ+ employees are closely monitoring corporate support for their community, with 93% believing that a perfect score on the Corporate Equality Index reflects strong support. As the backlash against DEI initiatives grows, it remains to be seen how companies will respond to the voices of their LGBTQ+ workforce.

 

Fast Company

As hurricane season peaks and wildfire risks rise, the IRS emphasizes the importance of having an emergency preparedness plan. September is National Preparedness Month, and taxpayers are encouraged to protect essential documents and create inventories of their property. "Having updated documents readily available can help victims apply for relief," the IRS states. Keeping critical documents in fireproof containers and storing digital copies securely is advised. The IRS disaster loss workbooks can assist in documenting belongings for insurance claims. Following a federal disaster declaration, the IRS may postpone tax deadlines and automatically apply relief to affected taxpayers.

 

Tax Notes

Cyber-attacks pose a risk as big as terrorism and flooding, according to insurance groups Zurich and Marsh McLennan, which are urging state support to help the industry to absorb losses. 

 

Financial Times