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  • Big May Day events in Asia call for better labor conditions

    Big May Day events in Asia call for better labor conditions

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    SEOUL, South Korea — A large number of workers and activists in Asian countries are set to mark May Day on Monday with protests calling for higher salaries and better working conditions, among other demands.

    May Day, which falls on May 1, is observed in many countries as a day to celebrate workers’ rights with rallies, marches and other events.

    In South Korea, more than 100,000 people planned to attend various rallies across the country in its biggest May Day gatherings since the pandemic began in early 2020, according to organizers. Similar events to mark the international labor day were expected in other Asian countries since COVID-19 restrictions were drastically loosened worldwide.

    The two main rallies in Seoul, the South Korean capital, were expected to draw about 30,000 people each to listen to speeches by leading union members, sing songs and watch performances before marching through the streets, according to the organizers: the Korean Confederation of Trade Union and the Federation of Korean Trade Unions.

    Seoul police had planned to mobilize thousands of officers to maintain order and said they will sternly deal with any illegal activities such as assaulting police officers and occupying streets at undeclared locations.

    Rally participants will call for an increase in minimum wages, repeat their demands not to ease corporate punishment for industrial accidents, and protest what they call the government’s anti-labor policies. Their trade unions accuse the government of clamping down on some labor unions in the name of reforming their alleged irregularities.

    The conservative government led by President Yoon Suk Yeol has been pushing for a set of labor reform steps. It’s called for more transparent accounting records of labor unions and an end of what it calls illegal acts like unions pressing firms to hire union members and some workers coercing kickback-like payments from companies.

    Han Sang-jin, a spokesperson at the Korean Confederation of Trade Union, said his union members plan to stage a large-scale strike in July if their demands over labor issues aren’t met by then.

    In North Korea, the country’s main Rodong Sinmun newspaper published a lengthy editorial urging workers to lend greater support to leader Kim Jong Un, fulfill their set production quotas and improve public livelihoods.

    “We should become genuine socialist workers who uphold the ideas and leadership of the respected general secretary with pure conscience and fidelity,” the paper said, calling Kim by his title at the ruling Workers’ Party.

    Kim has been pushing for greater public support of his family’s rule as he’s calling for a stronger, self-reliant economy to overcome pandemic-related hardships and protracted security tensions with the United States over his nuclear program. Outside experts say North Korea hasn’t shown any signs of a humanitarian crisis.

    Workers in Indonesia marked the international labor day Monday with rallies in major cities across Southeast Asia’s largest economy. About 50,000 workers were expected to take part in traditional May Day marches in the capital, Jakarta, according to the Confederation of Indonesian Trade Unions, which represents 32 labor unions.

    Thousands still angry at the new Job Creation Law gathered near the National Monument waving colorful flags of labor groups and banners with demands. They later marched to the Constitutional Court and near the heavily guarded Presidential Palace to demand the repeal of the legislation. More than 6,000 police personnel, backed by soldiers, were deployed to secure the capital and authorities blocked streets leading to the compound.

    The Job Creation Law amended more than 70 previous laws and was intended to improve bureaucratic efficiency as part of efforts by President Joko Widodo’s administration to attract more investment to the country. But critics remain unhappy, saying it will still benefit business at the expense of workers and the environment.

    “Job Creation Law must be repealed for the sake of working situation improvement,” said protester Sri Ajeng. “It’s only oriented to benefit employers, not workers.”

    Similar rallies were also held in Bandung, Yogyakarta, Surabaya and other cities around the country. They called on the government to pay more attention to Indonesian migrant workers overseas and make every effort to stop human trafficking and job outsourcing.

    In Japan, May Day celebrations in Tokyo and elsewhere were held over the weekend without any pandemic-related restrictions for the first time in four years. Prime Minister Fumio Kishida attended a Saturday event at a Tokyo park, which drew thousands of workers, politicians and representatives from major unions.

    “I am taking part today because I want to build on the momentum toward higher wages. The most important goal in my ‘new capitalism’ policy is higher wages,” Kishida told the crowd.

    The new capitalism program pushed by the ruling Liberal Democratic Party centers around the private sector and the government working together to get the Japanese economy growing. Unionized workers have been pushing to win wage increases amid inflationary pressures.

    At Tokyo’s Yoyogi park, thousands of labor union members, opposition lawmakers and academics gathered Monday for the May Day event, demanding enough wage increases to offset the impact of rising costs while their lives are still recovering from the damages of the pandemic. Monday’s May Day rally was held separately and organized by liberal-leaning groups.

    Union leaders said government measures for salary increases are insufficient to catch up with rising prices, and workers’ real wages have continued to decline. They criticized Kishida’s plan to double defense budget, which requires tax increases in coming years, and said the money should be spent on welfare and social security and improve the people’s daily lives.

    “We oppose major military expansion and tax increase, and demand a large-scale wage increase that exceeds price increase,” said Yoshinori Yabuki, head of Tokyo Regional Council of Trade Unions, one of organizers. “Let’s keep fighting as we workers unite and seek peace and democracy in Japan.”

    Participants chanted “Gambaro!” meaning, “Let’s do our best!” before they took to the street for a march.

    ___

    Associated Press writers Yuri Kageyama and Mari Yamaguchi in Tokyo and Niniek Karmini in Jakarta, Indonesia, contributed to this report.

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  • A key inflation gauge tracked by Fed remained high in March

    A key inflation gauge tracked by Fed remained high in March

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    WASHINGTON — A key index of underlying inflation that is closely followed by the Federal Reserve remained elevated last month, keeping the Fed on track to raise interest rates next week for the 10th time since March of last year.

    The index, which excludes volatile food and energy costs to capture “core” prices, rose 0.3% from February to March and 4.6% from a year earlier — still far above the Fed’s 2% target rate. Some Fed officials are concerned that core inflation hasn’t declined much since reaching 4.7% in July.

    Overall prices ticked up just 0.1% from February to March, the smallest monthly rise since last July and down from a 0.3% increase from January to February, Friday’s Commerce Department report showed. Compared with a year ago, inflation slowed to just 4.2% from 5% in February, though much of that decline reflected lower gas prices. That is the lowest year-over-year overall inflation figure in nearly two years.

    A separate government report Friday showed that companies continued to provide solid pay raises to their employees last quarter. The report, called the employment cost index, which measures wages, salaries and benefits, rose 1.2% in the first three months of the year. That was up from 1.1% in the final quarter of last year.

    The increase suggested that many businesses are still feeling pressure to raise pay to find and retain workers. While good for employees, that trend could help accelerate inflation if companies raise their prices to cover their higher labor costs.

    The government also reported Friday that consumer spending was unchanged from February to March after a tiny gain of 0.1% the previous month, a sign consumers are getting more cautious amid high inflation and interest rates.

    The Fed is thought to monitor the inflation gauge that was issued Friday, called the personal consumption expenditures (PCE) price index, even more closely than it does the government’s better-known consumer price index. Typically, the PCE index shows a lower inflation level than CPI. In part, that’s because rents, which have been among the biggest drivers of inflation, carry twice the weight in the CPI that they do in the PCE.

    The PCE price index also seeks to account for changes in how people shop when inflation jumps. As a result, it can capture emerging trends — when, for example, consumers shift away from pricey national brands in favor of less expensive store brands.

    The PCE index showed that food prices dropped 0.2% from February to March. Gas costs plummeted 3.7%, which partly reflected seasonal changes. Prices at the pump have since increased in many states.

    The latest inflation figures point to the dilemma confronting officials at the Federal Reserve: Across the economy, price increases for many goods have slowed significantly. And some previous drivers of inflation, notably clogged supply chains, have eased. Yet prices for many services, including restaurants, auto insurance and hotel rooms, are still surging, fueled by robust demand from consumers who in many cases have enjoyed rising wages.

    As a result, the Fed is poised to announce another interest rate hike after its policy meeting next week. The likely quarter-point rise in its benchmark rate would raise it to about 5.1%, the highest level in 17 years.

    The Fed’s rate increases are intended to slow borrowing and spending, cool the economy and conquer high inflation. But in the process, the rate hikes typically lead to higher costs for many loans, from mortgages and auto purchases to credit cards and corporate borrowing, and heighten the risk of a recession. Most economists foresee a recession this year as a consequence.

    There is growing evidence that the Fed’s efforts to slow consumer spending and economic growth are succeeding. The government’s figures Friday on consumer spending suggested that consumers have grown more cautious since the start of the year, when spending had jumped 2% just in January. The spending surge that month was fueled by a nearly 9% jump in Social Security and other benefit payments that are intended to keep pace with inflation.

    And on Thursday, the government reported that the economy expanded at just a 1.1% annual rate in the January-March quarter, much less than the 2.6% growth in the previous quarter.

    Even as the economy slows, Fed officials have indicated that they intend to keep borrowing rates high through the end of the year.

    Analysts have expressed concern that last month’s collapse of two large banks is causing the banking industry as a whole to pull back on lending to shore up the industry’s financial health. Tighter credit standards could make it harder for businesses to borrow and expand, slowing the economy even further.

    At the Fed’s meeting in March, its economic staff forecast that the U.S. economy would fall into a “mild recession” this year, in part because of the economic impact of the banking industry’s turmoil.

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  • Stock market today: Wall Street down as First Republic falls

    Stock market today: Wall Street down as First Republic falls

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    NEW YORK — Wall Street is slipping Tuesday after a torrent of companies gave mixed earnings reports for the first three months of the year.

    The S&P 500 was 0.9% lower in afternoon trading. The Dow Jones Industrial Average was down 159 points, or 0.5%, at 33,716, as of 12:05 p.m. Eastern time, while the Nasdaq composite was 1.2% lower.

    First Republic Bank tumbled 29.5% for the sharpest loss in the S&P 500 after it said customers withdrew more than $100 billion in deposits during the first quarter. That doesn’t include $30 billion that big banks plugged in to build faith in their rival after the second- and third-largest U.S. bank failures in history shook confidence.

    The size of the drop in deposits overshadowed First Republic’s beating analysts’ expectations for earnings at the start of the year.

    The majority of companies so far this reporting season have been topping expectations, but the bar was set considerably low. Analysts are forecasting the worst drop in S&P 500 earnings since the spring of 2020, when the pandemic froze the global economy. That’s why Wall Street is focused just as much, if not more, on what companies say about their future prospects as they do about their past three months.

    UPS fell 9% after it met profit forecasts but said it made less in revenue than expected. It also said its revenue for the full year will likely come at the low end of its prior forecast, citing a challenging economy and other factors.

    GE Healthcare Technologies dropped 9%, and Danaher fell 6.2% despite both reporting better earnings and revenue than expected.

    On the winning side, PepsiCo rose 2.2% after beating profit expectations. Homebuilder PulteGroup rose 2.1% after also topping forecasts.

    The heart of earnings reporting season is arriving, and more heavy hitters are coming after trading closes for the day.

    Microsoft and Google’s parent company, Alphabet, are both on the schedule. Because they’re two of the biggest companies on Wall Street by market value, their stock movements carry extra weight on the S&P 500 and other market indexes.

    Broad stock indexes have so far been making only modest moves this earnings reporting season. The S&P 500 barely budged last week and ticked up just 0.1% on Monday. But volatility strategists at Barclays say the calm is unlikely to last for the long term.

    The economy is under stress from high interest rates meant to get inflation under control. High rates can do that, but only by putting the brakes on the entire economy and hurting investment prices. Big chunks of the economy outside the job market have already begun to slow or contract.

    With so much uncertainty about whether inflation can return to the Federal Reserve’s target without causing a recession, “we remain skeptical that markets are out of the woods,” Barclays strategists led by Stefano Pascale said in a report. They also pointed to “the risk of something breaking” in the financial system because of high rates.

    A report on Tuesday showed that confidence among consumers fell more sharply in April than expected, down to its lowest level since July. That’s a discouraging signal when consumer spending makes up the biggest part of the U.S. economy.

    A second report was more encouraging, saying sales of new homes rose by more than expected. The housing industry has been under pressure because higher mortgage rates are squeezing buyers.

    On Thursday, the U.S. will give its first estimate of how much the economy grew during the first three months of the year. Economists expect to see growth cooled to a 1.9% annual rate, down from 2.6% at the end of 2022.

    Much of the slowdown is due to Fed’s flurry of hikes to interest rates over the last year. The Federal Reserve meets next week, and much of Wall Street expects it to raise interest rates at least one more time before pausing.

    Beyond higher interest rates, Wall Street is also worried that the struggles of the U.S. banking industry could tighten the brakes even further on the economy. First Republic said its deposits have stabilized since late March, but it’s still working to cut expenses. If it and other banks pull back on lending, it could lead to lower growth across the economy.

    In the bond market, the yield on the 10-year Treasury fell to 3.43% from 3.50% late Monday. It helps set rates for mortgages and other important loans.

    The two-year yield, which moves more on expectations for Fed action, fell to 4.06% from 4.11%.

    In markets overseas, stock indexes were mostly lower in Europe and mixed across Asia.

    ——

    AP Business Writers Joe McDonald and Matt Ott contributed.

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  • No fruit, ham a luxury: Hungary food prices spike most in EU

    No fruit, ham a luxury: Hungary food prices spike most in EU

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    BUDAPEST, Hungary — Magdolna Gozon nibbles spicy green peppers from a fruit and vegetable stall at a sprawling indoor market in Budapest, sampling them to make sure they’re hot enough for a soup she’s cooking.

    The 83-year-old retiree can’t afford to buy more if they don’t have enough kick — not with her small pension and Hungary facing the biggest spike in food prices in the European Union.

    “I don’t buy fruits. We got potatoes from the municipality, so we don’t have to buy that, but onions became expensive,” said Gozon, who has stopped buying dairy and rarely shops for meat.

    Food prices have risen dramatically across Europe in recent months, jumping 19.6% in March from a year earlier and becoming the main driver of inflation as energy costs have fallen. But in Hungary, food prices have surged more than 45% over the year, according to EU statistics office Eurostat, far surpassing the next highest figure of just over 29% in Slovakia.

    Such price hikes are hitting consumers hard in the Central European country, forcing them to change what kind of food they buy and how much of it they can afford, and leading businesses to rethink what they offer for sale.

    “Habits have definitely changed, so people are really thinking about what they buy. We’re almost to the point where sausage and ham are considered luxury food items,” said Szilvia Bukta, a manager at a butchery stall in Budapest’s historic Grand Market Hall.

    “We also have to buy less because the prices are more expensive, and we know that there are not as many customers, so we definitely make purchases more carefully,” Bukta added.

    Some types of food in Hungary have nearly doubled in price in the past year. Staples like eggs, milk, butter and bread cost 72% to 80% more, pinching pocketbooks in a country where the median net wage is just over $900 per month.

    While most European economies are facing similar difficulties as Russia’s war in Ukraine fuels a cost-of-living crisis, inefficiencies in Hungary’s farming and food processing industries and a historic devaluation of the forint currency made the country’s “extreme inflation” worse than anywhere else in the EU, said Peter Virovacz, chief economist at ING Hungary.

    “There have been droughts everywhere, energy prices have increased everywhere, supplier costs have increased everywhere,” he said. “But if production is not efficient enough, then of course the domestic producers will find that it is much more burdensome to pay for these costs.”

    To make ends meet, not just farmers but restaurants, bakeries and other businesses have raised prices for customers and changed what they offer to avoid the most expensive ingredients.

    Cafe Csiga, a restaurant and bar on a leafy square in central Budapest, took hamburgers and French fries off the menu late last year in response to the soaring price of ingredients like meat and cooking oil, general manager Andras Kelemen said.

    “The (price of) raw materials has sharply increased. There were some items that went up around 100%,” he said. “Vegetables, especially in the winter period, and certain meats and meat products rose unbelievably.”

    It has sent Hungary’s overall inflation rate up to 25.6%, also the highest in the EU, whose average slowed to 8.3% last month. The rising cost of living has led to rapid increases in wages — added costs that businesses are partly pushing onto customers.

    “All our costs are constantly rising, and we have to raise wages in the meantime,” Kelemen said. “There is a certain point above which we do not want or dare to raise sales prices — but a 30% increase has been typical.”

    Eszter Roboz, owner of Babushka Bakery in Budapest, said she too has had to charge customers more. She also began using olive oil in some cakes because butter prices jumped 68% in March.

    “All the ingredients have risen in price to some degree, but for us, it was probably butter, olive oil and flour that were the most noticeable,” she said.

    While Hungary is a major producer of wheat, corn, oil seeds and meat, some 30% of food items in its grocery chains are imported, according to a 2022 study by the National Food Chain Safety Office.

    The Hungarian forint weakened more than 40% against the U.S. dollar and over 20% against the euro last year, making the costs of imports — and thus prices off the shelf — much higher, Virovacz said.

    “This simply means extra costs for suppliers, which they try to pass on to consumers in the end,” the economist said.

    Hungary’s food prices have shown meager signs of slowing, dropping three points from a peak in December of nearly 50%.

    But Hungary, Poland, Slovakia and Bulgaria recently banning grain imports from Ukraine amid a glut they say is hurting local farmers could drive food inflation higher, said Ian Mitchell, an economist and London-based co-director of the Europe program at the Center for Global Development.

    Virovacz, however, said people are spending less as their purchasing power and savings erode, so they likely won’t be willing to pay more for locally made bread and other food, preventing suppliers from passing on the extra costs.

    “We have reached a point where there is such an increase in prices and such a depletion of household reserves that people have actually started to tighten their belts and have started to consume much less,” he said.

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  • Lebanon’s parliament votes to postpone municipal elections

    Lebanon’s parliament votes to postpone municipal elections

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    BEIRUT — Lebanon’s parliament Tuesday postponed municipal elections for up to a year for a second time amid concerns by some lawmakers the government would not be able to secure the needed funding in time for polling.

    The delay came as Lebanon’s economy and infrastructure continue to crumble, with legislators in the deeply divided parliament unable to reach a settlement to end a presidential vacuum for almost six months.

    Lebanon’s municipal elections were originally slated for May last year but were postponed for a year because they coincided with parliamentary elections, which brought in a dozen reformist lawmakers running on anti-establishment platforms.

    Opposition and reformist groups would likely continue this momentum and win additional seats if local elections were held, as living conditions across the country continue to deteriorate. They have called for municipal elections to take place as planned in May, and most have boycotted parliament’s session.

    Lebanon has been without a fully functioning government for nearly a year as Prime Minister Najib Mikati heads a caretaker Cabinet with limited functions. The country has also been in a severe economic crisis since late 2019, with three-quarters of the population now living in poverty.

    Riot police lobbed tear gas Tuesday at hundreds of protesting retired soldiers who broke down a barbed wire fence near government headquarters in downtown Beirut as the Cabinet met. Protesters burned tires as scores of riot police and army soldiers surrounded the area.

    Retired military personnel have frequently protested the country’s dire economic conditions and wage and pension hikes that are adjusted to the country’s soaring inflation.

    Before the value of the national currency started spiraling in late 2019, the country’s monthly minimum wage was 675,000 pounds — about $450 dollars — but today is worth less than $7.

    Mikati’s Cabinet on Tuesday agreed to increase the private sector’s minimum monthly wage from 2.6 million to 9 million pounds, worth $92.50 at the country’s black market rate, which dominates the market. They also raised the exchange rate used for calculating customs fees from 30,000 pounds to the dollar to the central bank’s Sayrafa platform, where the dollar is valued at 86,700 pounds.

    Meanwhile, top political groups and leaders continue to quarrel. Mikati’s government and various major political groups in parliament, notably the Christian Free Patriotic Movement, have accused each other of stalling the securing of funding and logistics that caused the delay.

    “If you really didn’t want to postpone municipal elections, why did you attend today’s session and secure a quorum?” The prime minister said at parliament in a heated dispute with several parliamentarians.

    Just 65 of Lebanon’s 128 lawmakers attended, the bare minimum needed for a legislative session to secure a quorum.

    Earlier this month, caretaker Interior Minister Bassam Mawlawi, whose ministry oversees elections, said Lebanon was ready to hold timely municipal elections, and that he had secured funding from the European Union and the United Nations to ease the burden on the country’s shoestring budget.

    Both the EU and the U.N. have urged the crisis-hit country to hold elections on time. However, legislators have yet to pass a draft law that would secure an advance to the Interior Ministry.

    Deputy Speaker Elias Bou Saab said in a parliamentary committee session on funding that holding the vote on time would be “impossible” and added that Mawlawi’s representative had told lawmakers they could not secure the funds despite the interior minister’s claims.

    Lebanon’s last municipal elections in 2016 saw low voter turnout. In Beirut, local media reported a 20% voter turnout, whereas 48% of voters in Baalbek near the Syrian border cast their ballots.

    In Lebanon’s sect-based power-sharing system, citizens only directly vote in parliamentary and municipal elections. Parliamentarians, split evenly between Muslim and Christian sects, vote for a Maronite Christian president, who then negotiates alongside them to bring in a Sunni Muslim prime minister. The speaker of parliament is a Shiite Muslim.

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  • Today is Tax Day. Here’s what you need to know if you haven’t filed your return yet — and even if you have | CNN Business

    Today is Tax Day. Here’s what you need to know if you haven’t filed your return yet — and even if you have | CNN Business

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    Editor’s Note: This is an updated version of a story that originally ran on April 14, 2023.


    New York
    CNN
     — 

    It’s April 18, the official deadline to file your federal and state income tax returns for 2022. (It is also, apparently, National Animal Crackers Day for those who celebrate.)

    Whether you have already filed your tax return or still need to, the good news is this tax filing season has gone much more smoothly than the past three, which were hurt by the pandemic.

    “This is the first tax season since 2019 where the IRS and the nation were on normal footing,” IRS Commissioner Danny Werfel said in a call with reporters.

    For instance, Werfel noted that since January, thanks to an infusion of some new funding after years of budget cuts, IRS employees have been able to answer 87% of calls from filers with questions. Last year, they answered fewer than 15%. And the wait times on those phone calls dropped to just 4 minutes this filing season from 27 minutes last filing season.

    The agency also added a roster of new online tools for filers, he added.

    Those online tools may be especially helpful today if you are scrambling to get your return in before midnight. Or, if you’ve come to the realization that you need to file for an extension. Either way, here are some key things to know:

    Not everyone has to file on April 18: If you live in a federally declared disaster area, have a business there — or have relevant tax documents stored by businesses in that area — it’s likely the IRS has already extended the filing and payment deadlines for you. Here is where you can find the specific extension dates for each disaster area.

    Thanks to many rounds of extreme weather in recent months, for instance, tax filers in most of California — which accounts for 10% to 15% of all federal filers — have already been granted an extension until Oct. 16 to file and to pay, according to an IRS spokesperson.

    If you’re in the armed forces and are currently or were recently stationed in a combat zone, the filing and payment deadlines for your 2022 taxes are most likely extended by 180 days. But your specific extended filing and payment deadlines will depend on the day you leave (or left) the combat zone. This IRS publication offers more detail.

    Lastly, if you made little to no money last year (typically less than $12,950 for single filers and $25,900 for married couples), you may not be required to file a return. But you may want to anyway if you think you are eligible for a refund thanks to, for instance, refundable tax credits such as the Earned Income Tax Credit. (Use this IRS tool to gauge whether you are required to file this year.) You also are likely eligible to use IRS Free File (intended for those with adjusted gross income of $73,000 or less) so it won’t cost you to submit a return.

    Your paycheck may not be your only source of income: If you had one full-time job you may think that is the only income you made and have to report. But that’s not necessarily so.

    Other potentially taxable and reportable income sources include:

    • Interest on your savings
    • Investment income (e.g., dividends and capital gains)
    • Pay for part-time or seasonal work, or a side hustle
    • Unemployment income
    • Social Security benefits or distribution from a retirement account
    • Tips
    • Gambling winnings
    • Income from a rental property you own

    Organize your tax documents: By now you should have received every tax document that third parties are required to send you (your employer, bank, brokerage, etc.).

    If you don’t recall receiving a hard copy of a tax form in the mail, check your email and your online accounts — a document may have been sent to you electronically.

    Here are some of the tax forms you may have received:

    • W-2 from your wage or salaried jobs
    • 1099-B for capital gains and losses on your investments
    • 1099-DIV from your brokerage or company where you own stock for dividends or other distributions from their investments
    • 1099-INT for interest over $10 on your savings at a financial institution
    • 1099-NEC from your clients, if you worked as a contractor
    • 1099-K for payments for goods and services through third-party platforms like Venmo, CashApp or Etsy. The 1099-K is required if you made more than $20,000 in over 200 transactions during the year. (Next year the reporting threshold drops to $600.) But even if you didn’t get a 1099-K you still must report all the income that you made over third-party platforms in 2022.
    • 1099-Rs for distributions over $10 that you received for a pension, annuity, retirement account, profit-sharing plan or insurance contract
    • SSA-1099 or SSA-1042S for Social Security benefits received.

    “Be aware that there’s no form for some taxable income, like proceeds from renting out your vacation property, meaning you’re responsible for reporting it on your own,” according to the Illinois CPA Society.

    One very last-minute way to reduce your 2022 tax bill: If you’re eligible to make a tax-deductible contribution to an IRA and haven’t done so for last year, you have until April 18 to contribute up to $6,000 ($7,000 if you’re 50 or older). That will reduce your tax bill and augment your retirement savings.

    Proofread your return before submitting it: Do this whether you’re using tax software or working with a professional tax preparer.

    Little mistakes and oversights delay the processing of your return (and the issuance of your refund if you’re owed one). You want to avoid things like having a typo in your name, birth date, Social Security number or direct deposit number; choosing the wrong filing status (e.g., married vs single); making a simple math error; or leaving a required field blank.

    What to do if you can’t file by April 18: If you’re not able to file on time, fill out Form 4868 electronically or on paper and send it in no later than today. You will be granted an automatic six-month extension to file.

    Note, however, that an extension to file is not an extension to pay. You will be charged interest (currently running at 7%) and a penalty on any amount you still owe for 2022 but haven’t paid by April 18.

    So if you suspect you still owe tax — perhaps you had some income outside of your job for which tax wasn’t withheld or you had a big capital gain last year — approximate how much more you owe and send that money to the IRS by the end of today.

    You can choose to do so by mail, attaching a check to your extension request form. Make sure your envelope is postmarked no later than April 18.

    Or the more efficient route is pay what you owe electronically at IRS.gov, said CPA Damien Martin, a tax partner at EY. If you do that, the IRS notes you will not have to file a Form 4868. “The IRS will automatically process an extension of time to file,” the agency notes in its instructions.

    If you opt to electronically pay directly from your bank account, which is free, select “extension” and then “tax year 2022” when given the option.

    You can also pay by credit or debit card, but you will be charged a processing fee. Doing so, though, may become much more costly than just a fee if you charge your tax payment but don’t pay your credit card bill off in full every month, since you likely pay a high interest rate on outstanding balances.

    If you can’t pay what you owe in full, the IRS does have some payment plan options. But it might be smart to first consult with a certified public accountant or a tax preparer who is an enrolled agent to make sure you are making the best choice for your circumstance.

    If you still owe income taxes to your state, remember that you may need to go through a similar exercise of filing for an extension and making a payment to your state’s revenue department, Martin said.

    Use this interactive tax assistant for basic questions you may have: The IRS provides an “interactive tax assistant” that can help you answer more than 50 basic questions pertaining to your individual circumstance on income, deductions, credits and other technical questions.

    If you’ve already filed your return, you’re probably glad to have it in the rear view mirror. But you may still have a few questions about what’s ahead.

    What about my refund? If you are due a refund, the IRS typically sends it within 21 days of receiving your return. When yours does arrive, it may be smaller than last year, even if your financial life didn’t change much. That’s because a number of Covid-related tax breaks expired.

    So far, the average refund paid was $2,878 for the week ending April 7, down from $3,175 at the same point in last year’s filing season.

    Will I be audited?: The reasons and methods for auditing a taxpayer can vary — and many audits result in “no change,” meaning you don’t end up owing anything more to the IRS. But one thing is common for the vast majority of US tax filers: Audit rates are exceedingly low.

    For filers reporting incomes between $50,000 and $200,000, only 0.1% of them were audited in 2020, according to the latest data from the IRS. Even for very high income filers, audit rates were quite low: Just 0.4% for those reporting income of between $1 million and $5 million; 0.7% for those with income between $5 million and $10 million; and 2.4% for returns with income over $10 million.

    Looking ahead, the IRS commissioner noted in a press call that the agency will be using money from the Inflation Reduction Act to bolster its compliance efforts to focus more on auditing high-income individuals — defined as making $400,000 or more. As for filers with income below that level, he said he did not anticipate any change in the likelihood they would be audited.

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  • Opinion: Why millionaires like us want to pay more in taxes | CNN

    Opinion: Why millionaires like us want to pay more in taxes | CNN

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    Editor’s Note: Abigail Disney is an Emmy-winning documentary filmmaker, activist, and member of the Patriotic Millionaires. Her latest film, “The American Dream and Other Fairy Tales,” co-directed with Kathleen Hughes, made its world premiere at the 2022 Sundance Film Festival. Morris Pearl is the chair of Patriotic Millionaires, and former managing director of BlackRock. The opinions expressed in this commentary are their own. View more opinion on CNN.



    CNN
     — 

    Tuesday is Tax Day in America, one of the most stressful days of the year, when many taxpayers will finally end their procrastination, file their federal returns, and hope for a refund from the IRS. But for many of the nation’s wealthiest, it’s just another Tuesday.

    Morris Pearl

    Tax Day isn’t just a filing deadline — it’s also an annual reminder that the ultra-rich exist in an entirely separate world when it comes to taxes. For us, the loopholes are bigger and the rates are sometimes lower. Meanwhile, the rich keep getting richer, with the wealth of billionaires in particular growing by more than $1.5 trillion over the last few years.

    This status quo is unfair, but even more importantly, it’s unsustainable. Such high levels of inequality are pushing our economy and our democracy to their breaking points. That’s why we should examine how we can set our country up for long-term stability and prosperity. And we should start by ensuring that the ultra-rich pay more of what they owe the country that made their success possible.

    There are three changes to the tax code that would help us do just that:

    Right now, the US tax system values money over sweat. If you work hard for your money instead of earning it passively, you’re essentially penalized for it. People who earn a salary pay significantly higher tax rates on their income than wealthy investors who passively earn capital gains income.

    Inheriting money is an even better deal. Thanks to former president Donald Trump’s 2017 tax law, the first $12.92 million (or $25.84 million for a married couple) is completely exempt from any estate tax, and the stepped-up basis loophole allows wealthy families to permanently erase millions in capital gains taxes by resetting the market value of those assets to their value at the time of the original owner’s death. With this, it becomes relatively simple for the rich to inherit tens, even hundreds of millions of dollars, and pay almost nothing in taxes. Someone working for that money, on the other hand, would pay over a third of it in federal income taxes.

    Why do we have a tax code that says working people should be taxed more than wealthy investors and those who got rich just by virtue of being born into the right family? At the end of the day, money is money, whether you worked for it or whether you inherited it. As an heiress and an investor, we should not be paying lower tax rates than people who earn their money from working.

    It’s time for the tax code to treat all income equally by taxing all capital gains over $1 million at the same rates as ordinary income, and replacing our loophole-ridden estate tax with a simpler inheritance tax that treats inherited wealth as income.

    We can’t just focus on income, however, because many of the richest Americans earn basically no taxable income of any kind in a typical year. Capital gains are only taxed when assets are sold, so instead of selling them, the ultra-rich use their assets as collateral to borrow vast sums of money at extremely low interest rates to live on, and then declare little or even negative “income” on their tax forms. This “Buy, Borrow, Die” strategy is a major reason billionaires paid a lower effective tax rate over recent years than working-class families.

    By rethinking what is taxable, we can get access to the trillions of dollars of billionaire wealth that is untouchable under our current tax structure. That’s why President Biden has proposed the Billionaire Minimum Income Tax, which would tax the unrealized capital gains of the wealthiest households and why others have proposed wealth taxes on billionaires.

    Finally, one of the most straightforward changes needed is to simply tax the extremely rich more than the merely rich. Our income tax caps out at a top rate of 37% for any income over $578,125 (or $693,750 for married couples). No matter how much more someone makes, they’ll never pay more than 37% in federal income taxes.

    While someone earning $600,000 is certainly making enough to live a very comfortable life, they’re in a different world than someone making $600 million a year. In order to reflect the real differences between the rich and the ultra-rich, we need to return to the top rates we had through the most prosperous decades of the 20th century and add significantly more tax brackets. They should reach up to 90% for people making more than $100 million a year.

    These three changes certainly won’t fix all our country’s problems on their own, but they would go a long way in stopping the steady flow of our country’s wealth toward a smaller and smaller group of people, a change that would make both our democracy and our economy more stable. The tax code can be a powerful tool for both social and economic change. We just need to use it more effectively.

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  • Retail spending fell in March as consumers pull back | CNN Business

    Retail spending fell in March as consumers pull back | CNN Business

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    Washington, DC
    CNN
     — 

    Spending at US retailers fell in March as consumers pulled back after the banking crisis fueled recession fears.

    Retail sales, which are adjusted for seasonality but not for inflation, fell by 1% in March from the prior month, the Commerce Department reported on Friday. That was steeper than an expected 0.4% decline, according to Refinitiv, and above the revised 0.2% decline in the prior month.

    Investors chalk up some of the weakness to a lack of tax returns and concerns about a slowing labor market. The IRS issued $84 billion in tax refunds this March, about $25 billion less than they issued in March of 2022, according to BofA analysts.

    That led consumers to pull back in spending at department stores and on durable goods, such as appliances and furniture. Spending at general merchandise stores fell 3% in March from the prior month and spending at gas stations declined 5.5% during the same period. Excluding gas station sales, retail spending retreated 0.6% in March from February.

    However, retail spending rose 2.9% year-over-year.

    Smaller tax returns likely played a role in last month’s decline in retail sales, along with the expiration of enhanced food assistance benefits, economists say.

    “March is a really important month for refunds. Some folks might have been expecting something similar to last year,” Aditya Bhave, senior US economist at BofA Global Research, told CNN.

    Credit and debit card spending per household tracked by Bank of America researchers moderated in March to its slowest pace in more than two years, which was likely the result of smaller returns and expired benefits, coupled with slowing wage growth.

    Enhanced pandemic-era benefits provided through the Supplemental Nutrition Assistance Program expired in February, which might have also held back spending in March, according to a Bank of America Institute report.

    Average hourly earnings grew 4.2% in March from a year earlier, down from the prior month’s annualized 4.6% increase and the smallest annual rise since June 2021, according to figures from the Bureau of Labor Statistics. The Employment Cost Index, a more comprehensive measure of wages, has also shown that worker pay gains have moderated this past year. ECI data for the first quarter of this year will be released later this month.

    Still, the US labor market remains solid, even though it has lost momentum recently. That could hold up consumer spending in the coming months, said Michelle Meyer, North America chief economist at Mastercard Economics Institute.

    “The big picture is still favorable for the consumer when you think about their income growth, their balance sheet and the health of the labor market,” Meyer said.

    Employers added 236,000 jobs in March, a robust gain by historical standards but smaller than the average monthly pace of job growth in the prior six months, according to the Bureau of Labor Statistics. The latest monthly Job Openings and Labor Turnover Survey, or JOLTS report, showed that the number of available jobs remained elevated in February — but was down more than 17% from its peak of 12 million in March 2022, and revised data showed that weekly claims for US unemployment benefits were higher than previously reported.

    The job market could cool further in the coming months. Economists at the Federal Reserve expect the US economy to head into a recession later in the year as the lagged effects of higher interest rates take a deeper hold. Fed economists had forecast subdued growth, with risks of a recession, prior to the collapses of Silicon Valley Bank and Signature Bank.

    For consumers, the effects of last month’s turbulence in the banking industry have been limited so far. Consumer sentiment tracked by the University of Michigan worsened slightly in March during the bank failures, but it had already shown signs of deteriorating before then.

    The latest consumer sentiment reading, released Friday morning, showed that sentiment held steady in April despite the banking crisis, but that higher gas prices helped push up year-ahead inflation expectations by a full percentage point, rising from 3.6% in March to 4.6% in April.

    “On net, consumers did not perceive material changes in the economic environment in April,” Joanne Hsu, director of the surveys of consumers at the University of Michigan, said in a news release.

    “Consumers are expecting a downturn, they’re not feeling as dismal as they were last summer, but they’re waiting for the other shoe to drop,” Hsu told Bloomberg TV in an interview Friday morning.

    This story has been updated with context and more details.

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  • Still haven’t filed your taxes? Here’s what you need to know | CNN Business

    Still haven’t filed your taxes? Here’s what you need to know | CNN Business

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    New York
    CNN
     — 

    So far this tax season, the IRS has received more than 90 million income tax returns for 2022.

    That means tens of millions of households have yet to file their returns. If yours is among them, here are some last-minute tax-filing tips to keep in mind as the Tuesday, April 18 deadline approaches.

    Not everyone has to file on April 18: If you live in a federally declared disaster area, have a business there — or have relevant tax documents stored by businesses in that area — it’s likely the IRS has already extended the filing and payment deadlines for you. Here is where you can find the specific extension dates for each disaster area.

    Thanks to many rounds of extreme weather in recent months, for instance, tax filers in most of California — which accounts for 10% to 15% of all federal filers — have already been granted an extension until Oct. 16 to file and to pay, according to an IRS spokesperson.

    If you’re in the armed forces and are currently or were recently stationed in a combat zone, the filing and payment deadlines for your 2022 taxes are most likely extended by 180 days. But your specific extended filing and payment deadlines will depend on the day you leave (or left) the combat zone. This IRS publication offers more detail.

    Lastly, if you made little to no money last year (typically less than $12,950 for single filers and $25,900 for married couples), you may not be required to file a return. But you may want to anyway if you think you are eligible for a refund thanks to, for instance, refundable tax credits such as the Earned Income Tax Credit. (Use this IRS tool to gauge whether you are required to file this year.) You also are likely eligible to use IRS Free File (intended for those with adjusted gross income of $73,000 or less) so it won’t cost you to submit a return.

    Your paycheck may not be your only source of income: If you had one full-time job you may think that is the only income you made and have to report. But that’s not necessarily so.

    Other potentially taxable and reportable income sources include:

    • Interest on your savings
    • Investment income (e.g., dividends and capital gains)
    • Pay for part-time or seasonal work, or a side hustle
    • Unemployment income
    • Social Security benefits or distribution from a retirement account
    • Tips
    • Gambling winnings
    • Income from a rental property you own

    Organize your tax documents: By now you should have received every tax document that third parties are required to send you (your employer, bank, brokerage, etc.).

    If you don’t recall receiving a hard copy of a tax form in the mail, check your email and your online accounts — a document may have been sent to you electronically.

    Here are some of the tax forms you may have received:

    • W-2 from your wage or salaried jobs
    • 1099-B for capital gains and losses on your investments
    • 1099-DIV from your brokerage or company where you own stock for dividends or other distributions from their investments
    • 1099-INT for interest over $10 on your savings at a financial institution
    • 1099-NEC from your clients, if you worked as a contractor
    • 1099-K for payments for goods and services through third-party platforms like Venmo, CashApp or Etsy. The 1099-K is required if you made more than $20,000 in over 200 transactions during the year. (Next year the reporting threshold drops to $600.) But even if you didn’t get a 1099-K you still must report all the income that you made over third-party platforms in 2022.
    • 1099-Rs for distributions over $10 that you received for a pension, annuity, retirement account, profit-sharing plan or insurance contract
    • SSA-1099 or SSA-1042S for Social Security benefits received.

    “Be aware that there’s no form for some taxable income, like proceeds from renting out your vacation property, meaning you’re responsible for reporting it on your own,” according to the Illinois CPA Society.

    One very last-minute way to reduce your 2022 tax bill: If you’re eligible to make a tax-deductible contribution to an IRA and haven’t done so for last year, you have until April 18 to contribute up to $6,000 ($7,000 if you’re 50 or older). That will reduce your tax bill and augment your retirement savings.

    Proofread your return before submitting it: Do this whether you’re using tax software or working with a professional tax preparer.

    Little mistakes and oversights delay the processing of your return (and the issuance of your refund if you’re owed one). You want to avoid things like having a typo in your name, birth date, Social Security number or direct deposit number; choosing the wrong filing status (e.g., married vs single); making a simple math error; or leaving a required field blank.

    What to do if you can’t file by April 18: If you’re not able to file by next Tuesday, fill out Form 4868 electronically or on paper and send it in by April 18. You will be granted an automatic six-month extension to file.

    Note, however, that an extension to file is not an extension to pay. You will be charged interest (currently running at 7%) and a penalty on any amount you still owe for 2022 but haven’t paid by April 18.

    So if you suspect you still owe tax — perhaps you had some income outside of your job for which tax wasn’t withheld or you had a big capital gain last year — approximate how much more you owe and send that money to the IRS by Tuesday.

    You can choose to do so by mail, attaching a check to your extension request form. Make sure your envelope is postmarked no later than April 18.

    Or the more efficient route is pay what you owe electronically at IRS.gov, said CPA Damien Martin, a tax partner at EY. If you do that, the IRS notes you will not have to file a Form 4868. “The IRS will automatically process an extension of time to file,” the agency notes in its instructions.

    If you opt to electronically pay directly from your bank account, which is free, select “extension” and then “tax year 2022” when given the option.

    You can also pay by credit or debit card, but you will be charged a processing fee. Doing so, though, may become much more costly than just a fee if you charge your tax payment but don’t pay your credit card bill off in full every month, since you likely pay a high interest rate on outstanding balances.

    If you still owe income taxes to your state, remember that you may need to go through a similar exercise of filing for an extension and making a payment to your state’s revenue department, Martin said.

    Use this interactive tax assistant for basic questions you may have: The IRS provides an “interactive tax assistant” that can help you answer more than 50 basic questions pertaining to your individual circumstance on income, deductions, credits and other technical questions.

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  • What markets are watching after digesting the US jobs data | CNN Business

    What markets are watching after digesting the US jobs data | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    In an unusual coincidence, the US jobs report was released on a holiday Friday — meaning stock markets were closed when the closely-watched economic data came out.

    It was the first monthly payroll report since Silicon Valley Bank and Signature Bank collapsed. It also marked a full year of jobs data since the Federal Reserve began hiking interest rates in March 2022.

    While inflation has come down and other economic data point to a cooling economy, the labor market has remained remarkably resilient.

    Investors have had a long weekend to chew over the details of the report and will likely skip the typical gut-reaction to headline numbers.

    What happened: The US economy added 236,000 jobs in March, showing that hiring remained robust though the pace was slower than in previous months. The unemployment rate currently stands at 3.5%.

    Wages increased by 0.3% on the month and 4.2% from a year ago. The three-month wage growth average has dropped to 3.8%. That’s moving closer to what Fed policymakers “believe to be in line with stable wage and inflation expectations,” wrote Joseph Brusuelas, chief economist at RSM in a note.

    “That wage data tends to suggest that the risk of a wage price spiral is easing and that will create space in the near term for the Federal Reserve to engage in a strategic pause in its efforts to restore price stability,” he added.

    The March jobs report was the last before the Fed’s next policy meeting and announcement in early May. The labor market is cooling but not rapidly or significantly, and further rate hikes can’t be ruled out.

    At the same time Wall Street is beginning to see bad news as bad news. A slowing economy could mean a recession is forthcoming.

    Markets are still largely expecting the Fed to raise rates by another quarter point. So how will they react to Friday’s report?

    Before the Bell spoke with Michael Arone, State Street Global Advisors chief investment strategist, to find out.

    This interview has been edited for length and clarity.

    Before the Bell: How do you expect markets to react to this report on Monday?

    Michael Arone: I think that this has been a nice counterbalance to the weaker labor data earlier last week and all the recession fears. This data suggests that the economy is still in pretty good shape, 10-year Treasury yields increased on Friday indicating there’s less fear about an imminent recession.

    There’s this delicate balance between slower job growth and a weaker labor market without economic devastation. I think this report helps that.

    As it relates to the stock market, I would expect the cyclical sectors to do well — your industrials, your materials, your energy companies. If interest rates are rising, that’s going to weigh on growth stocks — technology and communication services sectors, for example. Less recession fears will mean investors won’t be as defensively positioned in classic staples like healthcare and utilities.

    Could this lead to a reverse in the current trend where tech companies are bolstering markets?

    Yes, exactly. It’s difficult to make too much out of any singular data point, but I think this report will hopefully lead to broader participation in the stock market. If those recession fears begin to abate somewhat, and investors recognize that recession isn’t imminent, there will be more investment.

    What else are investors looking at in this report?

    We’ve seen weakness in the interest rate sensitive parts of the market — areas that are typically the first to weaken as the economy slows down. So things like manufacturing, things like construction. That’s where the weakness in this jobs report is. And the services areas continue to remain strong. That’s where the shortage of qualified skilled workers remains. I think that you’re seeing continued job strength in those areas.

    What does this mean for this week’s inflation reports? It seems like the jobs report just pushed the tension forward.

    it did. I expect that inflation figures will continue to decelerate — or grow at a slower rate. But I do think that the sticky part of inflation continues to be on the wage front. And so I think, if anything, this helps alleviate some of those inflation pressures, but we’ll see how it flows through into the CPI report next week. And also the PPI report.

    Is the Federal Reserve addressing real structural changes to the labor market?

    The Fed was confused in February 2020 when we were in full employment and there was no inflation. They’re equally confused today, after raising rates from zero to 5%, that we haven’t had more job losses.

    I’m not sure why, but from my perspective, the Fed hasn’t taken into consideration the structural changes in the labor force, and they’re still confused by it. I think the risk here is that they’ll continue to focus on raising rates to stabilize prices, perhaps underestimating the kind of structural changes in the labor economy that haven’t resulted in the type of weakness that they’ve been anticipating. I think that’s a risk for the economy and markets.

    A few weeks ago, Before the Bell wrote about big problems brewing in the $20 trillion commercial real estate industry.

    After decades of thriving growth bolstered by low interest rates and easy credit, commercial real estate has hit a wall. Office and retail property valuations have been falling since the pandemic brought about lower occupancy rates and changes in where people work and how they shop. The Fed’s efforts to fight inflation by raising interest rates have also hurt the credit-dependent industry.

    Recent banking stress will likely add to those woes. Lending to commercial real estate developers and managers largely comes from small and mid-sized banks, where the pressure on liquidity has been most severe. About 80% of all bank loans for commercial properties come from regional banks, according to Goldman Sachs economists.

    Since then, things have gotten worse, CNN’s Julia Horowitz reports.

    In a worst-case scenario, anxiety about bank lending to commercial real estate could spiral, prompting customers to yank their deposits. A bank run is what toppled Silicon Valley Bank last month, roiling financial markets and raising fears of a recession.

    “We’re watching it pretty closely,” said Michael Reynolds, vice president of investment strategy at Glenmede, a wealth manager. While he doesn’t expect office loans to become a problem for all banks, “one or two” institutions could find themselves “caught offside.”

    Signs of strain are increasing. The proportion of commercial office mortgages where borrowers are behind with payments is rising, according to Trepp, which provides data on commercial real estate.

    High-profile defaults are making headlines. Earlier this year, a landlord owned by asset manager PIMCO defaulted on nearly $2 billion in debt for seven office buildings in San Francisco, New York City, Boston and Jersey City.

    Dig into Julia’s story here.

    Tech stocks led market losses in 2022, but seemed to rebound quickly at the start of this year. So as we enter earnings season, what should we expect from Big Tech?

    Daniel Ives, an analyst at Wedbush Securities, says that he has high hopes.

    “Tech stocks have held up very well so far in 2023 and comfortably outpaced the overall market as we believe the tech sector has become the new ‘safety trade’ in this overall uncertain market,” he wrote in a note on Sunday evening.

    Even the recent spate of layoffs in Big Tech has upside, he wrote.

    “Significant cost cutting underway in the Valley led by Meta, Microsoft, Amazon, Google and others, conservative guidance already given in the January earnings season ‘rip the band- aid off moment’, and tech fundamentals that are holding up in a shaky macro [environment] are setting up for a green light for tech stocks.”

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  • 5 tax tips for older adults

    5 tax tips for older adults

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    More than half of older taxpayers (57%) are worried they’ll have to pay more taxes this year because of the 5.9% Social Security cost-of-living adjustment in 2022, according to a January survey by The Senior Citizens League, a nonpartisan seniors group.

    Taxes for the over-65 set can feel more complicated for a variety of reasons: There are often multiple streams of income, some retirees still work part time, and people may be managing required minimum distributions from retirement accounts.

    “It can happen that people have more income in their later life than they did when they were working,” says Barbara O’Neill, a certified financial planner in Ocala, Florida, and the author of “Flipping a Switch : Your Guide to Happiness and Financial Security in Later Life.”

    For older adults, here are some items to keep in mind this tax season:

    1. MEDICARE THRESHOLDS MATTER

    Your income can affect your Medicare Part B and Part D premiums in the future because of the income-related monthly adjustment amount, or IRMAA. Medicare premiums are based on your tax return from two years prior, and you may have to pay more if your income exceeds certain thresholds.

    These IRMAA surcharges can be difficult to manage “because they operate as a cliff, not a phase-in,” says Edward Jastrem, a certified financial planner in Westwood, Massachusetts. “For example, if you are $1 over an income tier, you are subject to the full surcharge.”

    In 2023, people filing individually with a modified adjusted gross income of more than $97,000 in 2021 — or jointly with more than $194,000 — will pay higher monthly amounts for Medicare. “Tax bracket management becomes crucial in later life,” O’Neill says.

    2. REQUIRED DISTRIBUTIONS CAN GO TO CHARITY

    At age 73, you are required by the IRS to start taking required minimum distributions from tax-deferred retirement accounts. But once you hit age 70 1/2, you can have some or all of your required minimum distributions sent directly to a charity of your choice. This move will still count as a required minimum distribution, but the amount isn’t added to your taxable income.

    “If you take a regular RMD from your IRA, it gets added to your adjusted gross income for tax purposes,” says Ian Weinberg, a certified financial planner in Woodbury, New York. “It usually throws you into a higher bracket.”

    Sending money directly to charity is called a qualified charitable distribution, and you can do this with up to $100,000 of your annual required minimum distributions.

    3. SIDE BUSINESSES CHANGE THE TAX APPROACH

    About 1 in 4 adults 50 and older say they’re doing gig work or freelancing, according to a January survey from AARP.

    If you’re doing gig work, that counts as business income — which means you can deduct business expenses. This includes health insurance premiums if you’re paying for your own insurance. “Self-employed older adults on Medicare can deduct Medicare premiums for themselves and their spouses against business income,” O’Neill says.

    Other deductible expenses may include business supplies, home office costs and advertising expenses, which may include costs to run a website.

    4. SOCIAL SECURITY MAY BE TAXABLE

    Many people don’t realize that Social Security benefits are taxable if your income meets certain thresholds. “That takes people by surprise,” says Nadine Burns, a certified financial planner in Ann Arbor, Michigan.

    The taxable portion of your Social Security benefits is based on your combined income, which is the total of your adjusted gross income, nontaxable interest and half of your Social Security benefits. If you’re filing taxes as an individual and your combined income is over $25,000 — or over $32,000 if you’re filing a joint return — you may pay income tax on up to 50% to 85% of your benefits.

    5. STATE TAX BREAKS MAY BE AVAILABLE

    Your state may offer tax deductions or credits for retirees, so do some research. In South Carolina, for instance, all military retirement pay and Social Security income is exempt from state taxes, says Stephen Maggard, a certified financial planner in Columbia, South Carolina. Plus, he says, there’s a separate deduction for those over age 65.

    In Ohio, retirees may be eligible for credits based on retirement income or their age — there’s a senior citizen credit for taxpayers who were 65 or older during the tax year. Colorado offers an income tax credit of up to $1,000 to residents 65 and up if they meet income requirements. Check with your state tax department to see what’s possible.

    ________________________________________

    This article was provided to The Associated Press by the personal finance website NerdWallet. The content is for educational and informational purposes and does not constitute investment advice. Kate Ashford is a writer at NerdWallet. Email: kashford@nerdwallet.com. Twitter: @kateashford.

    RELATED LINKS:

    NerdWallet: What is the Medicare IRMAA, and when does it apply? https://bit.ly/nerdwallet-what-is-the-medicare-irmaa

    IRS: State Government Websites https://www.irs.gov/businesses/small-businesses-self-employed/state-government-websites

    METHODOLOGY:

    The survey by The Senior Citizens League was conducted in early fall of 2022 and had 1,429 participants, 97% of whom said they were collecting Social Security benefits.

    The Senior Citizens League. (January, 2023.) “Press Brief, Inflation — COLA Update.” https://seniorsleague.org/assets/Press-Briefing-01.12.2023.pdf

    The survey from AARP sampled 2,000 respondents ages 40-plus in the labor force, including oversamples of 1,079 Black workers, 1,103 Hispanic workers, 693 Asian American/Pacific Islander workers and 644 LGBTQ workers. The data was weighted to be nationally representative. The survey was fielded online from Sept. 15 to Oct. 12, 2022, in all 50 states and the District of Columbia.

    AARP. (January, 2023.) “Gig Work on the Rise Among Older Adults as Demand for Workplace Flexibility Grows.” https://press.aarp.org/2023-01-18-Gig-Work-on-the-Rise-Among-Older-Adults-as-Demand-for-Workplace-Flexibility-Grows

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  • Are inflation pressures easing? Jobs report may offer clues

    Are inflation pressures easing? Jobs report may offer clues

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    WASHINGTON — For more than a year, the Federal Reserve’s inflation fighters have been tightening their grip on the American economy with nine straight interest rate hikes. A key goal has been to slow the sizzling pace of hiring to help cool price pressures.

    So far, the job market has refused to crack.

    Hiring was surprisingly robust in both January and February, confounding forecasters. The unemployment rate remains barely above half-century lows.

    The latest economic signs, though, increasingly suggest that an economic slowdown may be upon us. Employers are posting fewer job openings. More Americans are lining up for unemployment aid. Manufacturers are in retreat. America’s trade with the rest of the world is shrinking. And though restaurants, retailers and other services companies are still growing, they are doing so more slowly.

    “The economic data seem to show the economy slowing down dramatically in the first quarter of 2023, bolstering the hopes of Fed officials that less demand will somehow bring inflation down,″ Christopher Rupkey, chief economist at the research firm FWDBONDS LLC, wrote this week.

    On Friday morning, the government will reveal whether the recent signs of weakness have finally caused hiring managers to begin a retreat. The Labor Department is expected to report that employers added 240,000 jobs in March, according to a survey of economists by the data firm FactSet.

    That would be down from 504,000 jobs in January and 311,000 in February. But it would probably still be too much for the Fed, which might conclude that the pace of hiring is still putting upward pressure on wages and prices and that further interest rates hikes are necessary.

    For Fed officials, taming inflation is Job One. They were slow to respond after consumer prices started surging in the spring of 2021, concluding that it was only a temporary consequence of supply bottlenecks caused by the economy’s surprisingly explosive rebound from the pandemic recession.

    Only in March 2022 did the Fed begin raising its benchmark rate from near zero. In the past year, though, it has raised rates more aggressively than it had since the 1980s to attack the worst inflation bout since then.

    And as borrowing costs have risen, inflation has steadily eased. The latest year-over-year consumer inflation rate — 6% — is well below the 9.1% rate it reached last June. But it’s still considerably above the Fed’s 2% target.

    Complicating matters is turmoil in the financial system. Two big American banks failed in March, and higher rates and tighter credit conditions could further destabilize banks and depress borrowing and spending by consumers and businesses.

    The Fed is aiming to achieve a so-called soft landing — slowing growth just enough to tame inflation without causing the world’s biggest economy to tumble into recession. Most economists doubt it will work; they expect a recession later this year.

    So far, the economy has proved resilient in the face of ever-higher borrowing costs. America’s gross domestic product — the economy’s total output of goods and services — expanded at a healthy pace in second half of 2022. Yet recent data suggests that the economy is losing momentum.

    On Monday, the Institute for Supply Management, an association of purchasing managers, reported that U.S. manufacturing activity contracted in March for a fifth straight month. Two days later, the ISM said that growth in services, which accounts for the vast majority of U.S. employment, had slowed sharply last month.

    On Wednesday, the Commerce Department reported that U.S. exports and imports both fell in February in another sign that the global economy is weakening.

    The Labor Department on Thursday said it had adjusted the way it calculates how many Americans are filing for unemployment benefits. The tweak added nearly 100,000 claims to its figures for the past two weeks and might explain why heavy layoffs in the tech industry this year had yet to show up on the unemployment rolls.

    The Labor Department also reported this week that employers posted 9.9 million job openings in February, the fewest since May 2021 but still far higher than anything seen before 2021.

    In its quest for a soft landing, the Fed has expressed hope that employers would ease wage pressures by advertising fewer vacancies rather than by cutting many existing jobs. The Fed also hopes that more Americans will start looking for work, thereby adding to the supply of labor and reducing pressure on employers to raise wages.

    The unemployment rate can tick up when more people look for jobs and can’t find them right away. That’s because only people who are actively looking for a job are counted as unemployed.

    Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said that “a rise in payrolls close to (200,000), a modest uptick in the unemployment rate — on a rise in the civilian labor force — and a deceleration in average hourly earnings would be a ‘Goldilocks’ scenario from the Fed’s perspective.”

    It would indicate, Farooqi said, “that the threat from wages to inflation is diminishing.”

    On the other hand, she said, a March hiring gain closer to 300,000 would suggest that the Fed needs to do more to fight inflation.

    “We don’t really have an accurate way to assess how the labor market is going to evolve in response to tighter monetary policy,” Farooqi said. “We have been expecting a loosening in labor market conditions for some time. Maybe that is now imminent.”

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  • The Fed could easily drive Black unemployment much higher than the overall jobless rate | CNN Business

    The Fed could easily drive Black unemployment much higher than the overall jobless rate | CNN Business

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    New York
    CNN
     — 

    Millions of jobs could be on the chopping block this year, as the Federal Reserve continues its rate-hiking campaign to tame inflation. But the effects of that action likely won’t reverberate evenly across the economy.

    The Fed has seen some success: Inflation has cooled for eighth consecutive months, according to the February Consumer Price Index. The Producer Price Index shows a dramatic drop in wholesale prices in February. And the Fed’s favored inflation gauge, the Personal Consumption Expenditures price index, has also started to moderate.

    But the job market has proved to be a formidable force, humming steadily in the face of climbing rates meant to slow its growth. After adding more than half a million jobs in January, the US economy then added 311,000 jobs in February, with an unemployment rate of 3.6% — just above a half-century low — according to the Bureau of Labor Statistics.

    However, the jobless rate isn’t expected to be that low for long.

    At its most recent policy-making meeting, the Fed released projections for the year ahead that showed unemployment could jump to 4.5%, representing another 1.5 million job losses, by the end of the year.

    While that’s a small improvement from the central bank’s previous 4.6% jobless rate estimate, economists say it’s possible the unemployment rate could rise above the Fed’s expectations. Moreover, they say that historically disadvantaged groups could be disproportionately affected by the central bank’s stringent monetary policy.

    While some groups often sidelined in the job market have seen benefits from this hot job market — women have seen a faster pace of job gains than men in recent months, for example — others, including Black women and Latino men, have seen slower recoveries in jobless rates since the onset of the Covid pandemic.

    Recession fears gained traction last month when the collapse of Silicon Valley Bank sent markets wobbling, raising concerns about the economy’s ability to handle more stress. Goldman Sachs revised its estimate of the United States entering a recession over the next 12 months to a 35% chance, up from its estimate of a 25% chance before the banking sector turmoil.

    That’s of particular concern to certain demographic groups: Jobless rates for Black and Hispanic Americans often increase by more than those of their White counterparts during recessions, said Rakesh Kochhar, a senior researcher focusing on demographics and social trends at the Pew Research Center.

    History makes that discrepancy clear.

    A Pew Research Center report comparing two recessions in recent decades shows how Black and Hispanic Americans experience disproportionate effects on their jobless rates during periods of economic downturn. From the second quarter of 2007 to the second quarter of 2009, during the Great Recession, the unemployment rate rose 6.5 percentage points for Black Americans. The Hispanic unemployment rate climbed 6.3 percentage points. For White workers, it increased 4 percentage points.

    And from the first quarter of 1990 to the first quarter of 1991, the unemployment rate climbed 1.4 percentage points for Black Americans and 2.1 percentage points for Hispanic Americans. The White unemployment rate rose 1.3 percentage points.

    Economists say it’s hard to guess the trajectory of the unemployment rate this year, noting it could very well exceed the Fed’s estimate.

    “There’s just tons of momentum, and once you slow the economy enough to get the unemployment rate moving up, it’s very hard to sort of turn that cruise ship back around,” said Josh Bivens, research director and chief economist at the Economic Policy Institute.

    As such, the Fed’s tightening efforts could easily drive the Black unemployment rate much higher than the overall jobless rate, said William Spriggs, an economics professor at Howard University and chief economist to the AFL-CIO.

    “If the Fed continues to use unemployment as its measure of labor force slack, and thinks they want a 4.5% unemployment rate — to make that happen, the Fed would have to induce net job loss in the labor market,” Spriggs told CNN in an email. “If we go through two months of negative job growth, all bets are off. The Black unemployment rate will easily get to 9% in that scenario.”

    One other likely consequence of growing unemployment is slowing wage growth, Bivens said.

    Like rising unemployment, stunted wage growth tends to hit marginalized groups harder. A 2021 Economic Policy Institute report shows that a 1 percentage point increase in overall unemployment correlates with about 0.5% slower wage growth for White median hourly wages. Wage growth falls by roughly 0.8% for Black median hourly wages.

    “A lot of people have this idea that in a recession, if unemployment rises by a couple of percentage points, as long as you’re not one of those unlucky people to lose the job, you’ve dodged the bullet,” Bivens said. “And that’s not true at all.”

    Still, a robust labor market isn’t a permanent solution to bridging employment disparities, even if the Fed does keep rates lower, says Wendy Edelberg, director of the Hamilton Project and a senior fellow in economic studies at the Brookings Institution.

    The job market’s recent strength is unsustainable, she said. The US economy needs about 75,000 net job gains a month to keep stable and is currently adding about 350,000 net job gains a month on average, according to Edelberg.

    “[The Fed is] right to be confident that one of the things that’s going to have to happen to get inflation back down to a normal, stable level is to get job growth to a normal, sustainable level,” Edelberg said. “But if the Fed’s actions resulted in a slower labor market, then inflation stayed high — that would be a disaster.”

    The March jobs report from the Department of Labor, due to be released Friday at 8:30 a.m., is expected to show the US economy gained 240,000 positions last month. ADP’s private-sector payroll report, generally seen by investors as a proxy for the trajectory of Friday’s number, fell short of expectations, with just 145,000 jobs added. Economists had expected private hiring would rise by 200,000 positions last month.

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  • Taxes and adulting: What to know about filing taxes on your own for the first time | CNN Business

    Taxes and adulting: What to know about filing taxes on your own for the first time | CNN Business

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    New York
    CNN
     — 

    For most people in their early- to mid-20s, filing taxes is right up there with having to pay rent and realizing you can’t take summers off anymore: an unwelcome fact of being an adult.

    If you’re a recent graduate working your first full-time job or supporting yourself for the first time, this tax-filing season may indeed be your first experience doing your own taxes without the help of a parent.

    So here are seven things to keep in mind.

    If you’re confounded by filing your taxes, you may think it’s because you’re young and inexperienced. Nonsense. Tax filers of all ages get confused by tax rules and the intricacies of all the tax documents required. And it doesn’t help that tax provisions are tweaked frequently.

    Your tax return is a financial snapshot of your life over a 12-month period, in this case 2022. And a lot can happen during that time that will have tax implications and need to be reported.

    “Think about what went on in your life in the past year,” said Tom O’Saben, the director of tax content at the National Association of Tax Preparers.

    For example, O’Saben asked, did you work more than one job? Did you move for a new job? Did you get laid off? Did you get married or have a child? Did you make student loan payments? Did you make money selling anything you own? Did you buy a home?

    Next, pull together all necessary documentation. In addition to receipts and other paperwork you may have kept, you should also have tax forms that were either mailed to you or sent electronically — from your employers, brokerage firms, college, loan servicers, the state unemployment office, etc.

    You’ll need the information on these forms to fill out your tax return accurately. Keep in mind, the IRS also has a copy of these “third-party” forms that were sent to you, so its systems will flag if there is any discrepancy between what is on the form sent to you and what you put on your return.

    Most people realize what they earn at a full-time job is subject to income tax and that those taxes are automatically withheld by your employer.

    But any side hustle income you generate, or money you make as a gig worker, is also taxable, even if you’re paid in cash or via a payment app. Ditto for tips. And often tax on that type of income is not withheld. You’re just paid a gross amount and will have to set aside money to cover the taxes owed on it.

    Severance payments and unemployment benefits may be taxable too.

    And so is investment income — meaning the profits (or “capital gain”) you make on the sale of an investment or property — which is basically the price for which you sell something minus the original price you paid for it. (Also worth noting: if you have investment income, also called “passive” income, it is taxed at a lower rate than your paycheck — i.e., “earned” income — assuming you held your investment longer than a year.)

    Most dividends and interest payments are also taxable.

    And remember all that lucrative fun you had betting on the SuperBowl or spending a weekend with friends in Vegas? Yup, your winnings from gambling and sports betting are considered taxable income. (The semi-good news is if you had any gambling losses last year, they can offset your wins, so it may be that you won’t owe tax on your winnings if your losses cancel them out.)

    For many of these types of income you should have received forms from your employer (a W2 if you’re a full-time employee); from your clients if you’re a contract or gig worker (eg. a 1099-K, a 1099-NEC) or, starting next year, from the payment apps on which you get paid for your goods and services (e.g., a 1099-MISC). Meanwhile, banks and brokerage firms will send you 1099-INTs (for interest), 1099-DIVs (for dividends) and 1099-Bs (for your capital gains and losses).

    If you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming, you don’t have to file a state tax return because those states don’t impose an income tax. If you live in New Hampshire and Tennessee, you won’t have to file a return for your salary and wages. But you may have to file a return if you got income from dividends and interest during the tax year.

    The standard deduction reduces your adjusted gross income. The amount for tax year 2022 is $12,950 for singles; $25,900 for married couples filing jointly; and $19,400 for heads of household (e.g., a single parent).

    “That’s the amount of money you don’t have to pay tax on,” O’Saben noted.

    The only filers who itemize their deductions are those whose deductions add up to more than the standard deduction. Itemized deductions include: charitable contributions, state and local income and property taxes, mortgage interest and casualty loss if you live in a federally declared disaster area.

    But even if you just take the standard deduction you may also take in addition what are called “above-the-line” deductions. These include up to $2,500 in student loan interest that you paid in 2022 (your student loan servicer should send you a Form 1098-E); any contributions you made to a deductible IRA or to a Health Savings Account; and, if you’re a teacher, up to $300 of what you spent on school supplies and personal protective equipment for your classroom.

    [For a fuller list of different types of taxable income (“additional income”) and above-the-line deductions (“adjustments to income”), see Schedule 1 to the federal 1040 form.]

    A tax credit is a dollar-for-dollar reduction of your tax bill and if it’s a “refundable” credit, which some are, it can actually increase your refund.

    Some credits to be aware of, especially if you’re not making a lot of income:

    The Earned Income Tax Credit: The EITC is intended to help low- and moderate-income workers (defined in 2022 as those with earned income under $59,187), and especially filers with children.

    The EITC is also available to earners without qualifying children and it’s worth $560 for 2022.

    Education credits: If you were in school last year, footed the costs and are not claimed as a dependent on anyone else’s tax return, you may be eligible for an American Opportunity Tax Credit or a Lifetime Learning Credit. To see if you qualify, here’s an IRS table comparing the eligibility requirements and the value of each of those credits. Also, check to see if your educational institution sent you a Form 1098-T, which you will need if you claim one of these credits.

    The Saver’s Credit: The Saver’s Credit is a federal match for lower-income earners’ retirement contributions for up to $2,000 a year.

    The Child Tax Credit: If you’re a parent you may claim a maximum child tax credit of $2,000 for each child through age 16 if your modified adjusted gross income is below $200,000 ($400,000 if filing jointly). Above those levels, the child tax credit starts to get reduced. And the portion of the credit treated as refundable — meaning it is paid to you even if you don’t owe any federal income tax — is capped at $1,500, and that is only available to those with earned income of at least $2,500.

    And if you paid for child care in 2022, you may be eligible to claim a dependent care credit.

    Your federal tax return is due on April 18. That is the day by which you must have filed your 2022 individual tax return and paid any remaining federal income taxes owed for last year. The only exceptions are for those who lived in federally declared disaster areas, in which case their deadlines are later.

    But anyone can apply for — and will automatically be granted — a six-month extension until October 16, 2023 to file their return if they submit Form 4868 by April 18.

    Note, though, that an extension to file is not an extension to pay if you still owe the IRS more in taxes for last year than you actually paid in 2022.

    So, unless you have good reason to believe you will receive a refund, get a ballpark estimate of what more you think you’ll owe the IRS and send in that check by April 18 if you file for an extension. Otherwise you could be hit with a late payment penalty. And that could be compounded by a failure-to-file penalty if you didn’t file on time or didn’t get an automatic filing extension.

    Sign up for CNN’s Adulthood, But Better newsletter series. Our seven-part guide has tips to help you make more informed decisions around personal finance, career, wellness and personal connections.

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  • Oil prices surge after OPEC+ producers announce surprise cuts | CNN Business

    Oil prices surge after OPEC+ producers announce surprise cuts | CNN Business

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    Hong Kong/Atlanta
    CNN
     — 

    Oil prices spiked during Asian trade Monday after OPEC+ producers said they would cut production in a surprise move.

    Brent crude, the global benchmark, jumped 4.8% to $83.73 a barrel, while WTI, the US benchmark, rose 4.9% to $79.36.

    Rising oil prices could mean inflation remains higher for longer, adding pressure to a hot-button issue for consumers around the world.

    On Sunday, Saudi Arabia announced that it would start “a voluntary reduction” in its production of crude oil, alongside other members or allies of the Organization of the Petroleum Exporting Countries (OPEC).

    The cuts will start in May and last through the end of the year, an official with the Saudi Ministry of Energy was quoted as saying by Saudi state-run news agency SPA.

    The reductions are on top of those announced by OPEC+ in October, according to SPA.

    That month, oil producers had agreed to slash output by 2 million barrels a day, the largest cut since the start of the pandemic and equivalent to about 2% of global oil demand.

    Saudi Arabia now says it will cut oil production by another half a million barrels a day.

    Meanwhile, Iraq will slash production by 200,000 barrels per day, and the United Arab Emirates will decrease output by 144,000 barrels per day.

    Kuwait, Algeria and Oman will also lower production by 128,000, 48,000 and 40,000 barrels per day, respectively.

    In a Sunday note, Goldman Sachs analysts said the move was unexpected but “consistent with the new OPEC+ doctrine to act pre-emptively because they can without significant losses in market share.”

    The collective output cut by the nine members of OPEC+ totals 1.66 million barrels per day, said the analysts, who hiked their price forecast for Brent this year to $95 per barrel.

    Saudi Arabia’s energy ministry described its latest reduction as a precautionary measure aimed at supporting the stability of the oil markets, according to SPA.

    The White House pushed back on that notion — as well as the latest cuts by OPEC+.

    “We don’t think cuts are advisable at this moment given market uncertainty — and we’ve made that clear,” a spokesperson for the National Security Council said. “We’re focused on prices for American consumers, not barrels.”

    In October, OPEC+’s decision to cut production had already rankled the White House.

    US President Joe Biden pledged at the time that Saudi Arabia would suffer “consequences.” But so far, his administration appears to have back off on its vows to punish the Middle East kingdom.

    Russia, a member of OPEC+, also said Sunday that it would extend a voluntary reduction of 500,000 barrels per day until the end of 2023. The move was announced by Russian Deputy Prime Minister Alexander Novak, as cited by state-run news agency TASS.

    That decision was less surprising. Goldman analysts said they had forecast the cut would last into the second half of the year.

    — CNN’s Hanna Ziady and Arlette Saenz contributed to this report.

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  • Alabama men’s basketball star Brandon Miller declares for NBA Draft, per reports | CNN

    Alabama men’s basketball star Brandon Miller declares for NBA Draft, per reports | CNN

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    CNN
     — 

    University of Alabama men’s basketball star Brandon Miller has declared for the 2023 NBA Draft, according to ESPN’s Adrian Wojnarowski.

    The 20-year-old freshman forward Miller is considered one of the top prospects in this year’s draft class. Miller averaged 18.8 points and 8.2 rebounds per game in 37 games played.

    Miller said he thanks “God, my family, my fans and all the coaches at the University of Alabama,” in a statement to ESPN.

    Miller helped lead the Crimson Tide to a 31-6 record and the top overall seed in the men’s NCAA tournament. Miller, playing through an injury, struggled in the tournament and Alabama would go on to lose in the Sweet 16 to San Diego State.

    CNN has reached out to the Alabama athletic department for comment but did not immediately hear back.

    The embattled star did not miss a game for the Crimson Tide this season, despite a fatal shooting near campus which the school said he is a “cooperative witness” in.

    A law enforcement officer testified that another man had texted Miller to bring the man’s gun to the scene, where Jamea Jonae Harris was shot dead in January, according to CNN affiliate WBMA.

    Two men have been charged with murder.

    Miller has not been charged with any crime.

    The Alabama athletic department said in February that Miller is “not considered a suspect … only a cooperative witness” in the murder case.

    The 2023 NBA Draft is scheduled for June 22 at the Barclays Center in Brooklyn, New York.

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  • King Charles state visit to France postponed amid violent pension protests | CNN

    King Charles state visit to France postponed amid violent pension protests | CNN

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    CNN
     — 

    King Charles’s state visit to France has been postponed amid planned protests over the French government’s controversial pension reforms.

    Both France’s Élysée Palace and Buckingham Palace confirmed the trip had been shelved on Friday morning.

    The British monarch and Queen Consort were supposed to visit the country from Sunday through Wednesday, and they would have traveled to Paris and the southwestern city of Bordeaux. However a decision to postpone the visit was made after demonstrations turned violent in some areas, including Bordeaux, on Thursday.

    Clashes between groups of protesters angry over proposed pension reforms and police broke out after workers staged a national strike throughout Thursday, with flare-ups in Paris and regional capitals. In Bordeaux, demonstrators set fire to the entrance of the city hall during skirmishes with police, according to CNN affiliate BFMTV.

    The Élysée Palace said in a statement that the King’s state visit “will be rescheduled as soon as possible.”

    “In view of yesterday’s announcement of a new national day of action against pension reform on Tuesday, March 28 in France, the visit of King Charles III, originally scheduled for March 26-29 in our country, will be postponed,” the statement read.

    “This decision was taken by the French and British governments, after a telephone exchange between the President of the Republic and the King this morning, in order to be able to welcome His Majesty King Charles III in conditions that correspond to our friendly relationship,” it continued.

    A Buckingham Palace spokesperson confirmed the postponement to CNN, adding: “Their Majesties greatly look forward to the opportunity to visit France as soon as dates can be found.”

    A UK government spokesperson also confirmed the King would not travel to France next week, adding that “this decision was taken with the consent of all parties, after the President of France asked the British Government to postpone the visit.”

    Charles and Camilla were due to travel from France to Germany on Wednesday for a state visit. The second leg of the trip is still expected to go ahead.

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  • Opinion: Why France is fuming at Macron | CNN

    Opinion: Why France is fuming at Macron | CNN

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    Editor’s Note: Catherine Poisson is an associate professor of Romance Languages at Wesleyan University in Middletown, Connecticut. Her research has focused on literature and culture of France from the 19th century to the present. The views expressed in this article are her own. Read more opinion at CNN.



    CNN
     — 

    As a native of France who has lived in America for many years, I never fail to be shocked at the sight of older workers packing groceries at the supermarket. It suggests to me a deplorable lack of social supports that could allow aged people to enjoy a dignified retirement.

    While it’s true that some people choose to work past retirement, most of us in this country, at some point or the other, have seen elderly people hard at work in occupations that people many years younger would find taxing.

    And yet, many Americans somehow seem to be puzzled by the recent protests over retirement benefits that are roiling the country of my birth.

    For the past three months, a spasm of demonstrations has gripped France over moves by the government to raise the retirement age from 62 to 64. In recent days, French indignation led to a no-confidence vote that President Emmanuel Macron only narrowly survived. A new round of mass protests called by organized labor took place on Thursday — the ninth day of strikes since the bill was introduced in January.

    Schools are closed because teachers are on strike. Transportation, including France’s usually reliable train service, is suddenly erratic because of the work stoppages. On top of all this, Parisians have seen their city’s streets strewn with tons of trash, after sanitation workers launched a labor action in solidarity.

    I return to France for several weeks each year, but have lived in the United States some 30 years and know both countries well. One thing that seems clear to me is that the kind of upheaval playing out in the country of my birth would be almost unthinkable in America. Americans seem not to be able to understand the source of the boiling national rage felt by the French over the planned increase in the retirement age.

    The closest analogy in the United States to anything like what my compatriots are experiencing would be the decision four decades ago to raise the age at which Social Security benefits are doled out.

    And that’s exactly what happened: The US government announced in 1983 that it would gradually raise the age for collecting full Social Security retirement benefits from 65 to 67 over a 22-year period, beginning in 2000. Of course, older Americans care deeply about Social Security — and often cast their votes accordingly. Still, it’s hard to imagine such a change going over quite so easily in France.

    For the most part, the demonstrations in France haven’t awakened Americans’ sense of empathy or solidarity. Instead, it has elicited expressions of sheer befuddlement. What on earth, my friends and acquaintances here ask, do the French have to complain about?

    Life in France is not perfect. But French citizens have a generous health care system, which means workers pay next-to-nothing out of pocket for medical care. University education is nearly free. Unemployment benefits allow laid-off workers to sustain a reasonable quality of life while they look for their next jobs.

    Yes, French workers have all of that. It is, in short, part of their birthright as citizens of France.

    After World War II, both the retirement system and the National Health care system were introduced in France, and though there have been limitations over the last twenty years, social benefits still make it among the most envied countries in Europe in terms of its social programs.

    If Americans are baffled by the French willingness to fight to hold onto these hard-won benefits, it is in part because the two countries have very different ideas about what it means to be a worker. In the United States, work is an identity. You are what you do.

    For those of us raised in French culture, work refers to a finite period of life lasting roughly 40 years. And when that work is done, you are still young enough and fit enough to enjoy the best of what life has to offer. It’s the norm that retirement years — or decades actually — are spent traveling, caring for grandchildren or picking up new hobbies.

    It’s part of our social compact: The French work hard during their most productive years during which time they pay what most Americans would consider usuriously high taxes. But then comes the much anticipated “Troisieme Age” — the “third age.” It’s a concept French people grow up with and cling to fervently for their entire lives.

    The “first age” is childhood. During life’s “second age,” many of us are saddled with responsibilities of work and raising children. The third age however promises a good, healthy retirement free from want and worry — the kind of retirement many in the United States cannot even dream of. It is no wonder that people are willing to take to the streets to protect it.

    The ongoing protests are also seen as a pushback against Macron’s imperious governing style. Years ago, he earned the nickname “Jupiter” — after the king of the Roman gods — as he was derided by some for his highhanded approach to governing — imposing his will, in the eyes of his critics, as if he were a sovereign rather than elected.

    Macron says retirement reform is necessary because the system is near collapse. There’s some disagreement about that, however. The budget appears to be balanced for the next dozen years, although it’s true that falling birth rates and increasing longevity pose a problem that will have to be addressed.

    Still, there are less draconian ways to fix problems posed by a future retirement fund shortfall. For starters, Macron might reverse his move to abolish the wealth tax. He might also reconsider corporate tax breaks that have benefited big business handsomely.

    His administration’s use last week of a constitutional maneuver to bypass a vote in the National Assembly and raise the retirement age is an example of his imperial style. It’s an approach to governing that Macron has used multiple times, including when he passed a budget late last year. And as the protests wear on, there’s been another sign of government heavy-handedness: Macron now has resorted to the “requisition” of some striking workers — in short requiring them to return to their places of employment or risk losing their jobs.

    Such moves are, in my view, an admission of political impotence rather than strength. The president has failed to see politics as the art of persuasion and is instead ruling by fiat. The brutal police crackdown on demonstrators protesting pension reforms led to hundreds of arrests in recent days, another sign that he lacks political deftness. The unions meanwhile show no sign of backing down, and are continuing to organize massive protests urging workers to stand firm and remain off the job.

    So what’s next? Surely the French will continue to take to the streets, something they always do with great gusto. Beyond this, it’s hard to say how this upheaval ends.

    There’s no question that the French are slow to embrace change. I am and will always remain staunchly French, although after many years in the US, I can see that my compatriots need to show greater flexibility. They hold on too long to obsolete aspects of their cherished way of life. It’s time for the French to abandon their “c’est tout ou rien” (“all or nothing”) approach as we negotiate what French society will look like in the future.

    But then I read about the latest moves to raise the US retirement age to 70, and think that my protesting countrymen have a thing or two that they can teach workers in America when it comes to protecting the sanctity of their golden years.

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  • French airports, schools and oil refineries hit by national strike over pension age increase | CNN Business

    French airports, schools and oil refineries hit by national strike over pension age increase | CNN Business

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    Paris
    CNN
     — 

    French transport networks, oil refineries and schools were hit by widespread disruption Thursday as workers staged a national strike to protest an increase in the retirement age that was pushed through parliament without a vote.

    Though sporadic demonstrations had popped up in Paris and other cities after the French government forced the bill through last week, Thursday marked the first day of coordinated action since then. It is the ninth day of strikes since the bill was introduced in January.

    Only two out of 14 metro lines in Paris were operating a normal service. RER train services, which run in the city and its suburbs, were severely reduced and only half of high-speed TGV trains were working. The nationwide strike has also affected air traffic, with 30% of flights impacted at Paris Orly airport.

    Unionized workers blockaded a major oil refinery in Normandy and another one in Fos-sur-Mer in the south of France, according to a government spokesperson.

    “We are intervening in a targeted manner to unblock oil storage tanks that are blocked by demonstrators,” the minister of energy transition, Agnès Pannier-Runacherin, said in a statement.

    “If the strike is a fundamental constitutional right, blockading is not one… The police is mobilized in difficult conditions and has my full support.”

    The government renewed its requisition order requiring workers to go back to work at the two blockaded refineries, the government spokesperson said.

    The government’s plan to raise the retirement age for most workers by two years was opposed by huge numbers of people. But despite protests that drew more than a million people onto streets across the country, President Emmanuel Macron’s government did not back down. It rammed the legislation through the French National Assembly last week using a constitutional clause that allows the government to bypass a vote.

    The country’s generous pension system and early retirement have long been a point of pride since they were enacted after World War II. Under the new law, the retirement age for most workers will be 64, still one of the lowest in the industrialized world.

    As a result of the refinery strikes, kerosene stocks at Charles De Gaulle airport, which serves Paris, were “under pressure,” and those at Orly airport were being monitored, according to the civil aviation authority.

    Earlier in the day, around 70 protesters blocked terminal one at Charles de Gaulle airport, an airport spokesperson told CNN.

    About 20% of teachers in public education also took part in the strikes, according to France’s education ministry.

    A protester stands near burning garbage bins during a demonstration as part of protests against the pension reform, in Nantes, France, March 23, 2023.

    Macron and his government have defended the retirement reform as necessary to keep the pension system funded. Taxes on current workers pay for the benefits of retirees, and as people live longer — and more baby boomers retire — the system would otherwise eventually go bankrupt, though the threat is not immediate.

    When the proposal was unveiled in January, the government said the reforms were necessary to prevent a projected 13.5 billion ($14.7 billion) euro hole opening up in the pension system in 2030.

    During an interview with two of France’s main television networks Wednesday, Macron said the bill should be enacted by the end of this year. He also defended the decision to push through the reform as financially necessary, no matter how unpopular it was.

    “It’s in the greater interest of the country. Between opinion polls and the national interest, I chose the national interest,” Macron said.

    — CNN’s Joseph Ataman and Olesya Dmitracova contributed to this report.

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  • Ramen noodles and drained savings: FEC weighs allowing candidates to use political cash to pay themselves bigger salaries | CNN Politics

    Ramen noodles and drained savings: FEC weighs allowing candidates to use political cash to pay themselves bigger salaries | CNN Politics

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    When Nabilah Islam began running for Congress in the 2020 cycle, she said she quickly discovered the high price of her decision.

    “It was impossible for me to have a full-time job and wage a competitive campaign,” the Georgia Democrat recalled. So, she gave up her work as a campaign consultant, paused paying her student loans and went without health insurance – in the middle of a pandemic – because she could no longer afford to pay the premiums. She drained her savings to pay living expenses.

    “I was eating ramen and turkey sandwiches every day,” said Islam, who lost her bid for a House seat and now serves in the Georgia state Senate. “It was one of the hardest things I had ever done in my life.”

    Now, the Federal Election Commission is taking up a request that Islam lodged in 2021 to change some of the federal rules governing the use of political cash. At a hearing Wednesday, the regulators weighed boosting the amount of campaign money candidates can use to pay themselves while running for office. They also are considering whether to allow federal candidates to use donors’ money to underwrite health insurance premiums and other benefits.

    Although the FEC now allows candidates to use campaign funds to pay themselves a salary, the agency set strict limits. That salary is capped at the annual salary for the office they are seeking or their earnings in the year before they became a candidate, whichever is the lower amount.

    The limits are aimed at preventing candidates from enriching themselves at donors’ expense, but they also bar candidates who were unemployed or at home caring for children in the prior year from using contributors’ money to draw a candidate salary.

    Supporters of the change say it would make it easier for a broader spectrum of Americans to run for federal office, including full-time caregivers, students and people from working-class backgrounds. But critics question whether it would encourage grift.

    “The reality is that giving up your salary for a year or two to run for Congress is unsustainable for most working people,” said Liuba Grechen Shirley, a former House candidate and founder and CEO of the Vote Mama Foundation, which aims to overcome the obstacles mothers face in running for office. She supports the rule change.

    “We have to make it the norm that candidates pay themselves a livable wage, so that they can run for office because that’s how we start to change the system,” she told CNN in an interview this week.

    Running for Congress is a time-consuming and expensive enterprise. The average successful House winner in the 2022 midterms spent nearly $2.8 million in campaign funds, according to OpenSecrets, a nonpartisan organization that tracks political money.

    And members of Congress, as a group, are far wealthier than the general US population. An OpenSecrets analysis of congressional financial disclosures reports in 2020 found that more than half the people in Congress that year were millionaires.

    Although a record number of women serve in Congress, they still make up just over a quarter of total representation, according to the Center for American Woman and Politics (CAWP) at Rutgers University.

    Only about 28% of all candidates for the House in 2022 were women, said Kelly Dittmar, CAWP’s director of research, underscoring that the gender disparities start long before Election Day.

    “If you could tell a potential candidate that they would have greater financial security if they decided to wage a campaign for office, then it might increase the pool of candidates, including women,” Dittmar said.

    The limits don’t just affect women.

    Maxwell Frost rides an elevator on his way to be interviewed on a podcast in Orlando, Florida, on August 30, 2022.

    Florida Rep. Maxwell Frost, who last year became the first Gen Z candidate to win a congressional seat, told the commissioners he “put himself in a bad financial place” by seeking a House seat.

    The 26-year-old Democrat said he left his job at a gun-violence prevention organization to run for office but quickly realized that he couldn’t sustain campaigning and driving part-time for Uber as he had planned.

    Frost drew headlines late last year after a landlord denied his application to rent an apartment in Washington, DC, because of his low credit score.

    “I did overcome the odds,” he testified Wednesday. “But there are often consequences when you participate in a system that’s not set up for you.”

    The FEC, which is not likely to make a decision in the coming weeks, is considering a range of options.

    Among them: Allowing candidates to earn, on a pro-rated basis, up to 50% – or as much as 100% – of the federal office they are seeking, regardless of what they earned in the year before they launched their campaigns. Rank-and-file members of Congress earn $174,000 a year, with those in top leadership positions collecting more.

    Other options include allowing candidates to receive a salary that’s tied to a $15-an-hour rate or to the minimum wage set by federal or state law.

    So far, a range of individuals and organizations – including the campaign arms for House Democrats and Republicans – have expressed general support for a change, although they diverge on the specific remedies.

    Some Republicans on the panel, including Commissioner James “Trey” Trainor, questioned whether the agency is overstepping its bounds by weighing a rule change and should instead ask Congress to change the federal law that bars candidates from converting campaign contributions to personal use.

    Bradley Smith, a former Republican FEC commissioner, testified that the agency should be wary of going too far with “feel-good rule-making.”

    “Why not allow candidates to pay for haircuts, better clothes, better food to keep a candidate’s energy up and fundraising or recharging time at the country club, all of which could be helpful to a campaign?” he asked.

    The commission also is considering whether to allow candidates to begin drawing a donor-funded salary as soon as they file a statement of candidacy rather than waiting, as is currently required, for primary ballot deadlines, which vary widely by state.

    Frost, the freshman congressman from Florida, also urged the commission to allow candidates to continue drawing a campaign salary after the election as they wait for their salaries as officeholders to kick in.

    Although the FEC often deadlocks along partisan lines, the commission has signaled an openness to easing some rules for candidates in the past.

    In 2018, the agency opened the door to candidates using campaign contributions to pay for child care benefits, following a request from Grechen Shirley. She said she did so after trying for months to juggle care for her small children while running for a House seat in Long Island. “I would literally be nursing my son, while my daughter put hairclips in my hair, and I’d have my headphones on and would be dialing for dollars,” she said.

    To date, 59 federal candidates have used campaign dollars for child care, according to Vote Mama. The group now is pressing states around the country to extend the policy to state and local candidates.

    This year, 19 bills to do so have been introduced in 13 states, Grechen Shirley said.

    Last year, Islam, 33, made history by becoming the youngest woman and the first Muslim woman elected to the Georgia state Senate. Although she is not currently planning another run for Congress, she said she is determined to see federal policy change.

    “I’m very persistent,” she said. “No one should have to go through all that in order to run for office.”

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