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Tag: U.S. Department of the Treasury

  • Dubai boom sees Russian cash, high rents and reborn projects

    Dubai boom sees Russian cash, high rents and reborn projects

    DUBAI, United Arab Emirates (AP) — Fourteen years after a financial crisis nearly brought Dubai to its knees, several major abandoned real estate projects are finally showing signs of life as part of a new economic boom in the city-state.

    As with previous upturns in Dubai, war is a driving force. But this time it’s Russian investors fleeing Moscow’s war on Ukraine, rather than people escaping Mideast battlefields.

    “There’s lots of parts of the world where there are real challenges and people looking for a safe haven,” said Richard Waind, group managing director for Betterhomes, a real estate brokerage in the emirate. “I think that’s a safe haven both for the capital but also for their families.”

    While there’s no sign the market could be in similar trouble as in 2009, some concerns have started to surface. Skyrocketing rental costs are worsening a cost-of-living squeeze for the foreign workforce that powers the emirate.

    Meanwhile, the U.S. Treasury is worried about the amount of Russian money flowing into the real estate market of the most populous city in the United Arab Emirates.

    “In theory, there should be significant reputational risk with the UAE apparently acting as a willing bridge, enabling Russian oligarchs to use the Emirates as a waystation between the Russian financial system and that of the West,” said Jodi Vittori, a nonresident scholar at the Carnegie Endowment for International Peace who has written extensively on Dubai being a money-laundering haven.

    “But the reality seems to point otherwise,” she said.

    Dubai’s government and the UAE’s Foreign Ministry did not respond to detailed questions from The Associated Press.

    It’s hard to overstate just how much the Emirates has changed over the last half century. Since 1968, the seven sheikdoms that make up the UAE have grown from a British protectorate of some 180,000 people to a federation that’s home to more than 9.2 million. Government statisticians say 3.5 million people live in Dubai alone, with an additional 1.1 million who temporarily live in the city or commute there for work each day.

    Oil, much of it from Abu Dhabi’s vast reserves, fueled the UAE’s initial modernization. After Dubai began allowing foreign ownership of “freehold” properties in 2002, the world’s tallest building, cavernous malls and sprawling subdivisions emerged from what once were uninterrupted stretches of windblown sand dunes.

    Real estate now represents some 10% of Dubai’s overall gross domestic product. After a slump due to COVID-19 restrictions, Dubai saw 86,849 residential sales in 2022, beating a previous record of 80,831 set in 2009.

    Buyers and renters have filled exclusive neighborhoods such as the Palm Jumeirah, a man-made archipelago in the shape of a palm tree that juts into the Persian Gulf.

    The average asking rent for an apartment there is over $67,600 per year, with a villa renting for $276,000 annually, according to real estate firm CBRE. Analysts attribute growth in the luxury market to the wealthy fleeing pandemic restrictions elsewhere.

    That pressure has grown even outside the world of the ultra-wealthy. Rents on average across Dubai are up 26.9% year-on-year, even with anti-price-gouging protections. Families living in villas can expect to pay median rents of $76,000 a year.

    The sudden increase in rent prompted Gavin Hill, a 34-year-old car salesman from Essex, England, to move with his partner from a villa in the Dubai Hills neighborhood near downtown to a smaller apartment some 20 kilometers (12 miles) south.

    “In terms of looking for a new place, previously it was reasonably easy,” said Hill, who has moved four times in the six years he has lived in Dubai. “This time it’s a minefield”

    Russian money has helped fuel this.

    Betterhomes, which has operated here since 1986, saw Russians lead all other nationalities in purchases by non-residents for the first time last year. Other real estate brokers have also acknowledged anecdotally the influence Russians have had.

    “Since the crisis in Eastern Europe, we have seen a lot of Russians, a lot of Ukrainians as well, looking to both move their family and and money out there,” Waind said.

    Dubai has a history of seeking a business advantage in crises like the Arab Spring, COVID-19 and now Russia’s war on Ukraine. During the Iran-Iraq war of the 1980s, its new Jebel Ali port repaired ships damaged by explosions and gunfire in the Persian Gulf. The U.S.-led wars in Afghanistan and Iraq saw wealthy émigrés arrive in Dubai and the wider UAE.

    Those booms included what the West would consider dirty money as well. Some of the nearly $1 billion embezzled in the 2010 Kabul Bank scandal in Afghanistan went toward luxury homes on Palm Jumeirah. A cousin of Syrian President Bashar Assad tied to Assad’s sanctioned business dealings also owned property there.

    It remains unclear how many Russians have bought in Dubai — and whether the purchases involve people fleeing potential conscription into the Russian army or mass purchases that can be the work of money launderers. Unlike in the U.S., where property records are public, Dubai does not offer an easily accessible database of transactions.

    A team from the U.S. Treasury stopped in the UAE on a Mideast tour in January.

    A senior U.S. official told The Associated Press that the agency is concerned about the Russian money coming into the Dubai real estate market. The official spoke on condition of anonymity due to the sensitivity about discussing sanctions.

    Already, the Treasury has issued an alert aimed at U.S. commercial real estate stating that Russian oligarchs and their intermediaries could use “highly complex financing methods and opaque ownership structures” to hide illicit funds.

    But it remains unclear what, if any, action Treasury would take, considering the defense and economic ties the U.S. has with the Emirates. A global body focused on fighting money laundering put the UAE on its “gray list” over concerns it isn’t doing enough to stop criminals and militants from hiding wealth there.

    Once-abandoned projects that are showing new life include the Dubai Pearl, a planned $4 billion luxury development that was supposed to host multiple hotels and apartments in four, 73-story towers. Those plans collapsed during the 2009 financial crisis, brought on by the Great Recession, that forced Abu Dhabi to provide the city-state a $20 billion bailout.

    Demolition crews are now bringing down the concrete husk of the Dubai Pearl, though plans for the site remain unclear.

    Plans for the development of Palm Jumeirah’s forgotten twin, the Palm Jebel Ali, are also being relaunched.

    One practice that helped fuel Dubai’s 2009 crisis involved speculators buying yet-to-be built properties. “Off-plan” flipping is growing again as initial buyers “are capitalizing on the current market upswing and cashing out with a premium in hand,” local firm Property Monitor said.

    That company and others warn that speculative purchasing could lead to another bubble.

    “This does suggest a rise in speculative activity, which is a feature of any market that is seeing price rises,” said Scott Livermore, the chief economist at Oxford Economics Middle East.

    Hill — the renter from England — would like to buy a place if the market comes down again. But he’s cautious after what he’s seen in this boomtown.

    Dubai “can eat people out and spit them out quite quickly,” Hill said. “I’ve seen too many people go crazy and then go bust very, very fast.”

    ___

    Follow Jon Gambrell on Twitter at www.twitter.com/jongambrellAP.

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  • U.S. will hit its debt limit Thursday, start taking steps to avoid default, Yellen warns Congress

    U.S. will hit its debt limit Thursday, start taking steps to avoid default, Yellen warns Congress

    Treasury Secretary Janet Yellen on Friday notified Congress that the U.S. will reach its statutory debt limit next Thursday.

    After that, the Treasury Department this month will begin “taking certain extraordinary measures to prevent the United States from defaulting on its obligations,” Yellen wrote in a letter to new House Speaker Kevin McCarthy, R-Calif.

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    The Treasury “is not currently able” to estimate how long those emergency actions will allow the U.S. to pay for government obligations, she wrote.

    But, “It is unlikely that cash and extraordinary measures will be exhausted before early June,” Yellen added.

    She warned McCarthy that it is “critical that Congress act in a timely manner to increase or suspend the debt limit.”

    “Failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability,” Yellen wrote.

    “I respectfully urge Congress to act promptly to protect the full faith and credit of the United States.”

    A spokeswoman for McCarthy had no immediate comment on Yellen’s letter.

    White House Press Secretary Karine Jean-Pierre told reporters later Friday, “Congress is going to need to raise the debt limit without condition”

    “It is one of the basic items that Congress has to deal with and that should be done without conditions. So there is going to be no negotiation over it,” Jean-Pierre said. “This is something that must get done.”

    Yellen’s letter effectively starts a clock counting down how long the federal government can continue to make interest payments on its debt.

    Congress in December 2021 increased the federal debt limit to about $31.4 trillion.

    The limit is the total amount of money the U.S. government is allowed legally to borrow to pay for its existing obligations. Those obligations include “Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments,” Yellen noted

    The so-call called extraordinary measures available to the Treasury secretary free up the government’s borrowing capacity.

    This can extend the clock for weeks or months while Congress hashes out a bill to raise the borrowing limit.

    Senate Majority Leader Chuck Schumer, D-N.Y., and House Democratic leader Rep. Hakeem Jeffries of New York, in a joint statement, said, “Congress must act on legislation to prevent a disastrous default, meet our obligations and protect the full faith and credit of the United States.”

    “A default forced by extreme MAGA Republicans could plunge the country into a deep recession and lead to even higher costs for America’s working families on everything from mortgages and car loans to credit card interest rates,” the leaders said in their statement.

    Yellen wrote that the two extraordinary measures that Treasury expects to implement are redeeming existing and suspending new investments of the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund; and suspending reinvestment of the Government Securities Investment Fund of the Federal Employees Retirement System Thrift Savings Plan. 

    She noted Congress previously authorized the Treasury to use such measures, which the department has employed in the past.

    “After the debt limit impasse has ended,” those funds “will be made whole,” Yellen wrote.

    A senior White House official told CNBC the Biden administration plans to pursue negotiations in earnest with Congress after the mid-April tax deadline.

    At that point, the official said, the federal government will have a better idea of how much revenue is coming in, how far it will go in paying the country’s bills and how urgently it needs to reach a deal.  

    The trajectory of the American economy between now and then will also determine how brazen Republicans become in their demands to cut spending in response.

    Sen. Mitch McConnell of Kentucky, the top Senate Republican, has a long record of rejecting an increase to the debt ceiling unless fiscally conservative policies are included.

    It remains unclear whether the new GOP majority in the House under McCarthy will unite over its own set of demands. 

    McCarthy has made little secret of the fact that Republicans intend to demand massive spending cuts to the federal budget in exchange for approving an increase in the debt ceiling.

    But he told reporters on Thursday that GOP lawmakers “don’t want to put any fiscal problems through our economy, and we won’t.”

    The new House majority leader, Rep. Steve Scalise, R-La., earlier this week compared the U.S. borrowing limit to a household credit card, saying the nation needed to curb its spending the same way a person with maxed out credit cards would.

    “At the same time you’re dealing with the debt limit, you’re also putting mechanisms in place so that you don’t keep maxing it out,” Scalise said to reporters on Capitol Hill, “because if the limit gets raised, you don’t go to the store the next day and just max it out again.”

    “You start figuring out how to control the spending problem. And this has been going on for way too long. And we’re going to confront this,” he said.

    What Republicans have failed to say, however, is that, unlike a household that defaults on its debt, a U.S. government default would have massive repercussions around the world.

    A default on Treasury bonds could throw the U.S. economy into a tailspin as bad as the Great Recession, the research firm Moody’s Analytics warned in a September 2021 report.

    At the time, Moody’s also projected a 4% decline in gross domestic product and the loss of nearly 6 million jobs if the U.S. defaulted.

    In her letter to McCarthy on Friday, Yellen wrote, “Indeed, in the past, even threats that the U.S. government might fail to meet its obligations have caused real harms, including the only credit rating downgrade in the history of our nation in 2011.”

    Yellen added: “Increasing or suspending the debt limit does not authorize new spending commitments or cost taxpayers money. It simply allows the government to finance existing legal obligations that Congresses and Presidents of both parties have made in the past.”

    CNBC’s Emma Kinery contributed to this article.

    Correction: An earlier version of this article incorrectly stated the month in which Congress increased the statutory debt limit.

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  • White House gun violence program with philanthropies ends

    White House gun violence program with philanthropies ends

    NEW YORK — It was small, as Washington celebrations go — two senior Biden administration advisers gathered with program participants near the White House on a Thursday afternoon in December to mark the end of a little-known initiative with a budget of less than $8 million.

    The impact of The Community Violence Intervention Collaborative (CVIC), though, may yet be larger, both in the fight to slow the growth of gun violence and in the way philanthropy and government work together. The Biden administration used CVIC to get public funding to fight gun violence to 50 grassroots organizations that would normally be too small to get federal funding directly, as well as training and other support for 18 months to prepare them to receive even more funding.

    It’s an effort some participants applauded, while others argued the president could have backed it more forcefully.

    There was a feeling of momentum at the CVIC celebration, said Nancy Fishman, director at the Schusterman Family Philanthropies, toward what she and other advocates hope is the beginning of a shift in governmental approaches public safety. And it went beyond the attendance of nonprofit leaders, whose workers often go without recognition or pay, in a “rarefied space with others being celebrated,” she said.

    Daamin X Durden, executive director of the Newark Community Street Team, called it surreal “to be with one another, to hear the testimony and the journey experience and just to share that camaraderie and fidelity for one another.”

    On top of that, each of the 50 community violence interruption organizations at the celebration in the office building across from the White House also received $20,000, as a final “mini-grant,” which Durden said was much appreciated because it came with few strings attached.

    A nonprofit, Hyphen, coordinated the initiative, which included peer exchanges, training and mentorship, provided by five national nonprofits.

    Aqeela Sherrills, the advisor for the initiative at Hyphen, thinks many more officials and communities now understand violence interruption is a compliment to policing, not a strategy that is anti-police.

    “We’re not expecting our cops will be everything, to be teachers, lawyers, therapists and counselors,” he said.

    President Joe Biden announced the initiative in June 2021 shortly after the one year anniversary of George Floyd’s killing by Minneapolis police. During the second summer of the pandemic, hundreds were being shot daily, as the jump in gun homicides that started in 2020 across the country continued.

    As one piece of the administration’s response, Biden urged local governments to use coronavirus relief funds to strengthen public safety through investments in police as well as community-based programs.

    CVIC was another part of this public safety plan aimed to prepare grassroots groups to be accept more public funding by strengthening their infrastructure and sharing best practices to design programs.

    “The theory of change for this collaborative was to focus on community groups that were the hardest to reach, that were doing incredible work locally and had very little support,” said Fatimah Loren Dreier, who leads the Health Alliance for Violence Intervention, one of the organizations providing training.

    Decades of research has documented that small groups of people drive a disproportionate amount of gun violence and homicides in any given community. Violence interruption programs seek to identify those people, with some working out of hospitals, others offering a carrot-and-stick approach along with the police, while others provide cognitive behavior therapy and mentoring.

    If people agree to participate, the programs often also provide economic aid like paying for food or rent and connecting them to job trainings or other skills development — interventions that reveal the close connection between poverty and violence.

    Measured in terms of funds delivered to the grassroots organizations, the collaborative’s record is mixed. Six of the cities participating have so far not reported that they plan to spend coronavirus relief funds on violence interruption as of June, according to an academic analysis of Treasury Department data.

    Community violence interruption programs could be funded by about $350 billion included in the American Rescue Plan available for states, cities and municipalities to use for a broad range of programs, as well as another $120 billion in aid for schools.

    Alex Johnson, of the California Wellness Foundation, which funded early models of violence interruption in the 1990s, said many officials who control local budgets still do not understand the value of the approach.

    Four cities, including Newark, along with several of the grassroots organizations, recently won grants from the Department of Justice.

    Amanda Kass, of DePaul University, and Philip Rocco, of Marquette University, have been studying the use of coronavirus relief funds with support from The Joyce Foundation. They warn that numerous factors make it difficult to track spending, especially since municipalities have until 2026 to finalize their plans.

    So far, Kass and Rocco found participating cities allocated $71.7 million toward violence interruption programs — less than 1% of the $7.8 billion in coronavirus relief funds available. Their study excluded participating counties, Washington, D.C., and Rapid City, South Dakota.

    Some CVIC participants said they expected more money to come to them through the initiative. Dujuan Kennedy, who leads the violence interruption work for FORCE Detroit, felt Biden wasn’t sincere in his support.

    “It may be a talking point for him. It may be a campaign, but for us, it’s our little brothers, our sons, our daughters, our babies,” he said. “People are really dying out here.”

    In the summer, Pastor Mike McBride, the leader of the nonprofit Live Free USA, who has advocated for violence interruption for two decades, invited Kennedy and others to attend the signing ceremony at the White House for the gun safety legislation that helped states put in place “red flag” laws and included $250 million in funds for violence interruption. The U.S. Secret Service turned Kennedy away at the gates, along with several others, he thinks because of his manslaughter conviction. A U.S. Secret Service spokesperson said Kennedy and others, did not “meet federal security entrance requirements” and that the decision was not made by the White House.

    “My issue with that is: How can you acknowledge us and say we’re responsible enough to curb violence, but you’re allowing our records to prevent us from standing on your front grass?” Kennedy said.

    Kennedy doesn’t want an apology but instead, a pathway to redemption for people like him who are saving lives in their community and have made amends with the loved ones of the people they harmed or killed.

    Archana Sahgal, president of Hyphen, said the White House gathering in December proved there is no space between the administration’s words and actions and said she expects funding for violence interruption to increase as a result of the initiative.

    Julie Rodriguez, a senior advisor to Biden who has championed the collaborative, was not available to be interviewed and did not respond to a request for comment.

    Nina Revoyr, who leads the Ballmer Group’s work in Los Angeles, believes the White House has conferred a new level of credibility and legitimacy on violence interruption work. That along with George Floyd’s murder by Minneapolis police and the suffering and anger caused by the pandemic, has created a moment where both foundations and governments are more open to investing in violence interruption.

    “It’s not that the work hasn’t existed,” Revoyr said. “What has shifted is the moment in time.”

    ———

    Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

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  • EXPLAINER: 2023 tax credits for EVs will boost their appeal

    EXPLAINER: 2023 tax credits for EVs will boost their appeal

    WASHINGTON (AP) — Starting Jan. 1, many Americans will qualify for a tax credit of up to $7,500 for buying an electric vehicle. The credit, part of changes enacted in the Inflation Reduction Act, is designed to spur EV sales and reduce greenhouse emissions.

    But a complex web of requirements, including where vehicles and batteries must be manufactured to qualify, is casting some doubt on whether anyone can receive the full $7,500 credit next year.

    The Treasury Department is rolling out more information on which vehicles qualify and how individuals and businesses can access credit beginning in 2023. One big loophole that allows tax credits for EVs purchased for “commercial” use, such as leasing or ride-share, even if they are foreign-made is drawing the ire of Sen. Joe Manchin, D-W.Va., who says it could circumvent the intent of the law to favor American manufacturing.

    For at least the first two months of 2023, though, a delay in some of Treasury’s rules will likely make the full credit temporarily available to consumers who meet certain income and price limits.

    The new law also provides a smaller credit for people who buy a used EV.

    Certain EV brands that were eligible for a separate tax credit that began in 2010 and that will end this year may not be eligible for the new credit. Several EV models made by Kia, Hyundai and Audi, for example, won’t qualify because they are manufactured outside North America.

    The new tax credit, which lasts until 2032, is intended to make zero-emission vehicles affordable to more people. Here is a closer look at it.

    ___

    WHAT’S NEW FOR 2023?

    The credit of up to $7,500 will be offered to people who buy certain new electric vehicles as well as some plug-in gas-electric hybrids and hydrogen fuel cell vehicles. For people who buy a used vehicle that runs on battery power, a $4,000 credit will be available.

    But the question of which vehicles and buyers will qualify for the credits is complicated and will remain uncertain until Treasury issues the proposed rules in March.

    What’s known so far is that to qualify for the credit, new EVs must be made in North America. In addition, caps on vehicle prices and buyer incomes are intended to disqualify wealthier buyers.

    Starting in March, complex provisions will also govern battery components. Forty percent of battery minerals will have to come from North America or a country with a U.S. free trade agreement or be recycled in North America. (That threshold will eventually go to 80%.)

    And 50% of the battery parts will have to be made or assembled in North America, eventually rising to 100%.

    Starting in 2025, battery minerals cannot come from a “foreign entity of concern,” mainly China and Russia. Battery parts cannot be sourced in those countries starting in 2024 — a troublesome obstacle for the auto industry because numerous EV metals and parts now come from China.

    There also are battery-size requirements.

    ___

    WHICH VEHICLES ARE ELIGIBLE?

    Because of the many remaining uncertainties, that’s not entirely clear. However, the Treasury Department released an initial list of vehicles that meet the requirements to claim the new clean vehicle tax credit beginning Jan. 1, including models from Chrysler, Ford, Jeep, Lincoln, Nissan and Rivian. More vehicles will be added to the list in the weeks and months to come.

    The Energy Department also maintains a list of qualifying EVs.

    General Motors and Tesla have the most EVs assembled in North America. Each also makes batteries in the U.S. But because of the requirements for where batteries, minerals and parts must be manufactured, it’s likely that buyers of those vehicles would initially receive only half the tax credit, $3,750. GM says its eligible EVs should qualify for the $3,750 credit by March, with the full credit available in 2025.

    Until Treasury issues its rules, though, the requirements governing where minerals and parts must be sourced will be waived. This will allow eligible buyers to receive the full $7,500 tax incentive for qualifying models early in 2023.

    ___

    WHAT ABOUT PRICE?

    To qualify, new electric sedans cannot have a sticker price above $55,000. Pickup trucks, SUVs and vans can’t be over $80,000. This will disqualify two higher-priced Tesla models. Though Tesla’s top sellers, the models 3 and Y, will be eligible, with options, those vehicles might exceed the price limits.

    Kelley Blue Book says the average EV now costs over $65,000, though lower-priced models are coming.

    ___

    WILL I QUALIFY FOR THE CREDITS?

    It depends on your income. For new EVs, buyers cannot have an adjusted gross income above $150,000 if single, $300,000 if filing jointly and $225,000 if head of a household.

    For used EVs, buyers cannot earn more than $75,000 if single, $150,000 if filing jointly and $112,500 if head of household.

    ___

    HOW WILL THE CREDIT BE PAID?

    At first, it will be applied to your 2023 tax return, which you file in 2024. Starting in 2024, consumers can transfer the credit to a dealership to lower the vehicle price at purchase.

    ___

    WILL THE CREDITS BOOST EV SALES?

    Yes, but it probably will take a few years, says Mike Fiske, associate director for S&P Global Mobility. The credit may cause a bump in sales early next year because of Treasury’s delay in issuing the stricter requirements. But most automakers are now selling all the EVs they build and cannot make more because of shortages of parts, including computer chips.

    And automakers may have trouble certifying the sources of battery minerals and parts, a requirement for buyers to receive the full credit. Automakers have been scrambling to move more EV supply chains to the U.S.

    ___

    HOW DOES THE USED-EV CREDIT WORK?

    Consumers can receive tax credits of up to $4,000 — or 30% of the vehicle price, whichever is less — for buying EVs that are at least two years old. But the used EV must cost less than $25,000 — a tall order given the starting prices for most EVs on the market. A search on Autotrader.com shows that the Chevy Bolt, the Nissan Leaf and other relatively economical used EVs are listed at $26,000 or more for models dating back to 2019.

    On the other hand, used EVs need not be made in North America or comply with the battery-sourcing requirements. That means that, for instance, a 2022 Kia EV6 that’s ineligible for the new-vehicle credit because it’s made in South Korea can qualify for a used-car credit if its price falls below $25,000.

    “The real effects where these tax credits will have a big impact will be in the 2026-to-2032 period — a few years into the future — as automakers gear up and volumes increase,” said Chris Harto, a senior policy analyst for Consumer Reports magazine.

    ___

    WHY IS THE GOVERNMENT OFFERING THE CREDITS?

    The credits are part of roughly $370 billion in spending on clean energy — America’s largest investment to fight climate change — that was signed into law in August by President Joe Biden. EVs now make up about 5% of U.S. new-vehicle sales; Biden has set a goal of 50% by 2030.

    Sales of EVs have been climbing, particularly as California and other states have moved to phase out gas-powered cars. The rise of lower-cost competitors to Tesla, such as the Chevy Equinox, with an expected base price of around $30,000, are expected to broaden the EVs’ reach to middle-class households. S&P Global Mobility expects EVs’ share of auto sales to reach 8% next year, 15% by 2025 and 37% by 2030.

    ___

    COULD REQUIREMENTS BE EASED TO MAKE MORE EVs ELIGIBLE?

    It appears that may happen. Some U.S. allies are upset over North American manufacturing requirements that disqualify EVs made in Europe or South Korea.

    The requirements knock Hyundai and Kia out of the credits, at least in the short term. They plan to build new EV and battery plants in Georgia, but those won’t open until 2025. European Union countries fear that the tax credits could make their automakers move factories to the U.S.

    There is a loophole, however. The law appears to exempt commercial vehicles from the North America assembly and domestic battery mineral and parts requirements. That means that rental car and leasing companies with huge fleets as well as EVs used fuller-time for ride-share such as Uber and Lyft could be eligible for up to $7,500 in tax credits even for foreign-made EVs. A fact sheet released by Treasury on Thursday affirms it would allow exemptions for commercial vehicles, which the department says it must do based on the wording of the law.

    That move drew the anger of Manchin, a key vote in passing the Inflation Reduction Act, who on Thursday accused the Biden administration of bending to the desires of foreign countries. He said the exemptions undermine the law’s intent to “bring our energy and manufacturing supply chains onshore to protect our national security, reduce our dependence on foreign adversaries and create jobs right here in the United States.”

    Manchin said he would introduce legislation in the coming weeks that “prevents this dangerous interpretation from Treasury from moving forward.”

    ___

    ARE THERE CREDITS FOR CHARGING STATIONS?

    If you install an EV charger at home, credits may be available. The new law revives a federal tax credit that had expired in 2021; it provides 30% of the cost of hardware and installation, up to $1,000. It adds a requirement that the charger must be in a low-income or non-urban area. Businesses that install new EV chargers in those areas can receive tax credits of as much as 30% — up to $100,000 per charger.

    Residential EV chargers can range in cost from $200 to $1,000; installation can add several more hundred dollars.

    ___

    SO SHOULD I BUY NOW OR WAIT?

    That’s entirely a personal decision.

    If you’ve grown tired of volatile gasoline prices and are considering an EV, you might want to go ahead. Buying a qualifying EV in January or February could net you the full $7,500 tax break before more stringent requirements take effect in March. Additional state credits also may be available.

    But if you’re still on the fence, there’s no urgency. Consumers who rush to buy now, when relatively few qualifying EVs are available, may face dealer price markups. Within a few years, technology will improve, and more EVs will qualify for full credits.

    ___

    WHERE CAN I FIND MORE INFORMATION?

    The Treasury Department on Thursday released several frequently asked questions documents for individual and commercial customers on the clean vehicle tax credits meant to help them understand how to access the various tax incentives.

    The department also released a white paper explaining the anticipated direction that it is taking ahead of the proposed rule rollout.

    ____

    Krisher reported from Detroit. Associated Press writer Fatima Hussein contributed to this report.

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  • EXPLAINER: 2023 tax credits for EVs will boost their appeal

    EXPLAINER: 2023 tax credits for EVs will boost their appeal

    WASHINGTON — Starting Jan. 1, many Americans will qualify for a tax credit of up to $7,500 for buying an electric vehicle. The credit, part of changes enacted in the Inflation Reduction Act, is designed to spur EV sales and reduce greenhouse emissions.

    But a complex web of requirements, including where vehicles and batteries must be manufactured to qualify, is casting some doubt on whether anyone can receive the full $7,500 credit next year.

    The Treasury Department is rolling out more information on which vehicles qualify and how individuals and businesses can access credit beginning in 2023. One big loophole that allows tax credits for EVs purchased for “commercial” use, such as leasing or ride-share, even if they are foreign-made is drawing the ire of Sen. Joe Manchin, D-W.Va., who says it could circumvent the intent of the law to favor American manufacturing.

    For at least the first two months of 2023, though, a delay in some of Treasury’s rules will likely make the full credit temporarily available to consumers who meet certain income and price limits.

    The new law also provides a smaller credit for people who buy a used EV.

    Certain EV brands that were eligible for a separate tax credit that began in 2010 and that will end this year may not be eligible for the new credit. Several EV models made by Kia, Hyundai and Audi, for example, won’t qualify because they are manufactured outside North America.

    The new tax credit, which lasts until 2032, is intended to make zero-emission vehicles affordable to more people. Here is a closer look at it.

    ———

    WHAT’S NEW FOR 2023?

    The credit of up to $7,500 will be offered to people who buy certain new electric vehicles as well as some plug-in gas-electric hybrids and hydrogen fuel cell vehicles. For people who buy a used vehicle that runs on battery power, a $4,000 credit will be available.

    But the question of which vehicles and buyers will qualify for the credits is complicated and will remain uncertain until Treasury issues the proposed rules in March.

    What’s known so far is that to qualify for the credit, new EVs must be made in North America. In addition, caps on vehicle prices and buyer incomes are intended to disqualify wealthier buyers.

    Starting in March, complex provisions will also govern battery components. Forty percent of battery minerals will have to come from North America or a country with a U.S. free trade agreement or be recycled in North America. (That threshold will eventually go to 80%.)

    And 50% of the battery parts will have to be made or assembled in North America, eventually rising to 100%.

    Starting in 2025, battery minerals cannot come from a “foreign entity of concern,” mainly China and Russia. Battery parts cannot be sourced in those countries starting in 2024 — a troublesome obstacle for the auto industry because numerous EV metals and parts now come from China.

    There also are battery-size requirements.

    ———

    WHICH VEHICLES ARE ELIGIBLE?

    Because of the many remaining uncertainties, that’s not entirely clear. However, the Treasury Department released an initial list of vehicles that meet the requirements to claim the new clean vehicle tax credit beginning Jan. 1, including models from Chrysler, Ford, Jeep, Lincoln, Nissan and Rivian. More vehicles will be added to the list in the weeks and months to come.

    The Energy Department also maintains a list of qualifying EVs.

    General Motors and Tesla have the most EVs assembled in North America. Each also makes batteries in the U.S. But because of the requirements for where batteries, minerals and parts must be manufactured, it’s likely that buyers of those vehicles would initially receive only half the tax credit, $3,750. GM says its eligible EVs should qualify for the $3,750 credit by March, with the full credit available in 2025.

    Until Treasury issues its rules, though, the requirements governing where minerals and parts must be sourced will be waived. This will allow eligible buyers to receive the full $7,500 tax incentive for qualifying models early in 2023.

    ———

    WHAT ABOUT PRICE?

    To qualify, new electric sedans cannot have a sticker price above $55,000. Pickup trucks, SUVs and vans can’t be over $80,000. This will disqualify two higher-priced Tesla models. Though Tesla’s top sellers, the models 3 and Y, will be eligible, with options, those vehicles might exceed the price limits.

    Kelley Blue Book says the average EV now costs over $65,000, though lower-priced models are coming.

    ———

    WILL I QUALIFY FOR THE CREDITS?

    It depends on your income. For new EVs, buyers cannot have an adjusted gross income above $150,000 if single, $300,000 if filing jointly and $225,000 if head of a household.

    For used EVs, buyers cannot earn more than $75,000 if single, $150,000 if filing jointly and $112,500 if head of household.

    ———

    HOW WILL THE CREDIT BE PAID?

    At first, it will be applied to your 2023 tax return, which you file in 2024. Starting in 2024, consumers can transfer the credit to a dealership to lower the vehicle price at purchase.

    ———

    WILL THE CREDITS BOOST EV SALES?

    Yes, but it probably will take a few years, says Mike Fiske, associate director for S&P Global Mobility. The credit may cause a bump in sales early next year because of Treasury’s delay in issuing the stricter requirements. But most automakers are now selling all the EVs they build and cannot make more because of shortages of parts, including computer chips.

    And automakers may have trouble certifying the sources of battery minerals and parts, a requirement for buyers to receive the full credit. Automakers have been scrambling to move more EV supply chains to the U.S.

    ———

    HOW DOES THE USED-EV CREDIT WORK?

    Consumers can receive tax credits of up to $4,000 — or 30% of the vehicle price, whichever is less — for buying EVs that are at least two years old. But the used EV must cost less than $25,000 — a tall order given the starting prices for most EVs on the market. A search on Autotrader.com shows that the Chevy Bolt, the Nissan Leaf and other relatively economical used EVs are listed at $26,000 or more for models dating back to 2019.

    On the other hand, used EVs need not be made in North America or comply with the battery-sourcing requirements. That means that, for instance, a 2022 Kia EV6 that’s ineligible for the new-vehicle credit because it’s made in South Korea can qualify for a used-car credit if its price falls below $25,000.

    “The real effects where these tax credits will have a big impact will be in the 2026-to-2032 period — a few years into the future — as automakers gear up and volumes increase,” said Chris Harto, a senior policy analyst for Consumer Reports magazine.

    ———

    WHY IS THE GOVERNMENT OFFERING THE CREDITS?

    The credits are part of roughly $370 billion in spending on clean energy — America’s largest investment to fight climate change — that was signed into law in August by President Joe Biden. EVs now make up about 5% of U.S. new-vehicle sales; Biden has set a goal of 50% by 2030.

    Sales of EVs have been climbing, particularly as California and other states have moved to phase out gas-powered cars. The rise of lower-cost competitors to Tesla, such as the Chevy Equinox, with an expected base price of around $30,000, are expected to broaden the EVs’ reach to middle-class households. S&P Global Mobility expects EVs’ share of auto sales to reach 8% next year, 15% by 2025 and 37% by 2030.

    ———

    COULD REQUIREMENTS BE EASED TO MAKE MORE EVs ELIGIBLE?

    It appears that may happen. Some U.S. allies are upset over North American manufacturing requirements that disqualify EVs made in Europe or South Korea.

    The requirements knock Hyundai and Kia out of the credits, at least in the short term. They plan to build new EV and battery plants in Georgia, but those won’t open until 2025. European Union countries fear that the tax credits could make their automakers move factories to the U.S.

    There is a loophole, however. The law appears to exempt commercial vehicles from the North America assembly and domestic battery mineral and parts requirements. That means that rental car and leasing companies with huge fleets as well as EVs used fuller-time for ride-share such as Uber and Lyft could be eligible for up to $7,500 in tax credits even for foreign-made EVs. A fact sheet released by Treasury on Thursday affirms it would allow exemptions for commercial vehicles, which the department says it must do based on the wording of the law.

    That move drew the anger of Manchin, a key vote in passing the Inflation Reduction Act, who on Thursday accused the Biden administration of bending to the desires of foreign countries. He said the exemptions undermine the law’s intent to “bring our energy and manufacturing supply chains onshore to protect our national security, reduce our dependence on foreign adversaries and create jobs right here in the United States.”

    Manchin said he would introduce legislation in the coming weeks that “prevents this dangerous interpretation from Treasury from moving forward.”

    ———

    ARE THERE CREDITS FOR CHARGING STATIONS?

    If you install an EV charger at home, credits may be available. The new law revives a federal tax credit that had expired in 2021; it provides 30% of the cost of hardware and installation, up to $1,000. It adds a requirement that the charger must be in a low-income or non-urban area. Businesses that install new EV chargers in those areas can receive tax credits of as much as 30% — up to $100,000 per charger.

    Residential EV chargers can range in cost from $200 to $1,000; installation can add several more hundred dollars.

    ———

    SO SHOULD I BUY NOW OR WAIT?

    That’s entirely a personal decision.

    If you’ve grown tired of volatile gasoline prices and are considering an EV, you might want to go ahead. Buying a qualifying EV in January or February could net you the full $7,500 tax break before more stringent requirements take effect in March. Additional state credits also may be available.

    But if you’re still on the fence, there’s no urgency. Consumers who rush to buy now, when relatively few qualifying EVs are available, may face dealer price markups. Within a few years, technology will improve, and more EVs will qualify for full credits.

    ———

    WHERE CAN I FIND MORE INFORMATION?

    The Treasury Department on Thursday released several frequently asked questions documents for individual and commercial customers on the clean vehicle tax credits meant to help them understand how to access the various tax incentives.

    The department also released a white paper explaining the anticipated direction that it is taking ahead of the proposed rule rollout.

    ————

    Krisher reported from Detroit. Associated Press writer Fatima Hussein contributed to this report.

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  • How Bank of America achieved a massive comeback from the brink of collapse

    How Bank of America achieved a massive comeback from the brink of collapse

    The 2008 financial crisis had a devastating impact on Bank of America. Shares of the bank were trading for as low as $2.53 in 2009 and net income dropped from a high of $21 billion in 2006, to just $4 billion in 2008.

    “Bank of America was one reason why much of the investing public and consumers and government lost faith and trust in banking,” recalled Mike Mayo, a bank analyst at Wells Fargo. “If the government did not intervene for Bank of America and the other banks, Bank of America would have failed.”

    Fast forward to today, BofA is thriving despite concerns over inflation and threats of a possible recession. The bank reported net income of $31.9 billion in 2021, compared with just $4 billion in 2008.

    “As the rates have gone up and if the recession is shallow, then we’re going to see widening spreads and the ability of Bank of America to have significant earnings from net interest income,” said Kenneth Leon, a research director from CFRA Research. “This is unique to the banking industry and Bank of America being one of the largest banks, stands to benefit the most.”

    The hard-learned lessons from the financial crisis have also led BofA to undergo significant changes, allowing it to earn its position as the bank with the second-largest total assets in the United States. JPMorgan is still comfortably ahead as the largest bank in the U.S. based on total assets.

    “The big change at Bank of America is that they have gone from irresponsible growth to responsible growth,” said Mayo.

    A more conservative lending standard is just one example of the bank’s aim for sustainable growth.

    “One key aspect of Bank of America’s responsible growth is to say no and no more often,” explained Mayo. “So that when they say yes, it results in a lot more growth that’s sustainable, responsible and better for reputation.”

    BofA was unable to participate in CNBC’s coverage of this story.

    Watch the video to learn more about how Bank of America was able to achieve one of the biggest comebacks in banking history.

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  • How Bank of America came back from the brink of collapse

    How Bank of America came back from the brink of collapse

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    With assets totaling more than $3 trillion, Bank of America is the second-largest bank in the U.S. today. Shares of the company have seen astonishing gains of over 290% in the last decade. But just more than a decade ago, the 2008 financial crisis pushed the bank to the brink of collapse. It was a loss so catastrophic that it required a $45 billion bailout from the U.S. Treasury. So how was Bank of America able to stage such an impressive comeback and where is it headed next?

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  • China sanctions US individuals over action on Tibet

    China sanctions US individuals over action on Tibet

    BEIJING — China has sanctioned two U.S. individuals in retaliation for action taken by Washington over human rights abuses in Tibet, the government said Friday, amid a continuing standoff between the sides over Beijing’s treatment of religious and ethnic minorities.

    The Foreign Ministry said in a statement that Todd Stein and Miles Yu Maochun, along with their close family members, would be banned from entering China.

    Any assets they had in China would be frozen and they would be barred from contact with people or organizations within China.

    The notice said the measures were in response to the U.S. sanctioning two Chinese individuals “under the excuse of the ‘Tibet human rights’ issue.” Neither could immediately be reached for comment.

    On Dec. 9, the U.S. imposed sanctions on Wu Yingjie, the top official in Tibet from 2016 to 2021, and Zhang Hongbo, the region’s police chief since 2018.

    “Our actions further aim to disrupt and deter the People’s Republic of China’s (PRC) arbitrary detention and physical abuse of members of religious minority groups in the Tibetan Autonomous Region,” Secretary of State Antony Blinken said in announcing the sanctions.

    An accompanying Treasury Department notice said Wu had been responsible for “stability policies” in Tibet whose implementation involved “serious human rights abuse, including extrajudicial killings, physical abuse, arbitrary arrests, and mass detentions.”

    It said that during Zhang’s tenure, police have been engaged in serious human rights abuses, including “torture, physical abuse, and killings of prisoners, which included those arrested on religious and political grounds.”

    The Chinese announcement gave no specific accusations against Stein and Yu.

    Stein has been deputy staff director at the Congressional-Executive Commission on China since 2021 and previously served as senior advisor to Under Secretary of State for Civilian Security, Democracy and Human Rights Sarah Sewall, including serving as her lead staffer on Tibetan issues. Previously, he was director of government relations at the monitoring group International Campaign for Tibet.

    The Chinese-born Yu is a senior academic who taught at the U.S. Naval Academy and a noted critic of the regime of Chinese Communist Party leader Xi Jinping. He served as key China adviser under former Secretary of State Mike Pompeo.

    China in recent years has passed legislation mandating tit-for-tat sanctions against foreign individuals from the U.S., the EU and other countries over perceived slights against its national interests. Washington and others have compiled a long list of Chinese officials barred from visiting or engaging in transactions with their financial institutions ranging from the leader of the semi-autonomous city of Hong Kong to local officials accused of human rights abuses.

    China claims Tibet has been part of its territory for centuries, although backers of the exiled Buddhist leader the Dalai Lama say it was functionally independent for most of that time.

    Communist forces invaded in 1950 and China has ruled the Himalayan region with an iron fist ever since, imposing ever stricter surveillance and travel restrictions since the last uprising against Beijing’s rule in 2008. Lengthy prison sentences in dire conditions are imposed for acts of defiance, including defending the region’s unique language and Buddhist culture from attempts at assimilation.

    China has also been accused of detaining hundreds of thousands of Uyghurs and other Muslim minorities in reeducation camps as part of a campaign to wipe out their native language and culture, including through forced adoptions and sterilizations. China denies such charges, saying it has only been fighting terrorism, separatism and religious extremism.

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  • Tesla offers rare year-end discounts on 2 top-selling models

    Tesla offers rare year-end discounts on 2 top-selling models

    DETROIT — Tesla Inc. is offering rare discounts through year’s end on its two top-selling models, an indication that demand is slowing for its electric vehicles.

    The Austin, Texas, company started offering a $3,750 incentive on its Model 3 sedan and Model Y SUV on its website earlier this month, but on Wednesday doubled the discount to $7,500 for those who take delivery between now and Dec. 31.

    The move comes ahead of a new federal tax credit of up to $7,500 that’s scheduled to take effect Jan. 1. Teslas weren’t eligible for a previous federal tax credit program because the company had reached a limit of 200,000 vehicles sold. Next year’s credits don’t have such a limit.

    “This is a sign of demand cracks and not a good sign for Tesla heading into the December year-end,” Wedbush analyst Dan Ives said in an e-mail. “EV competition is increasing across the board, and Tesla is seeing some demand headwinds.”

    Lower priced versions of the Models 3 and Y will be eligible for the federal tax credit come January due to limits on vehicle purchase prices outlined in the Inflation Reduction Act.

    Without the discounts, the Model 3 starts at just over $48,000 including shipping, while the Y has a starting price of just over $67,000. To be eligible for the federal tax credit, vehicles can’t have a sticker price of over $55,000 for sedans and $80,000 for trucks and SUVs.

    In a regulatory quirk, many vehicles like Teslas that are made in North America likely will be eligible for the full $7,500 tax credit from January into March because the Treasury Department is still working on rules requiring battery minerals and parts to come from North America. It’s likely that most of the vehicles will only be eligible for half the credit once the rules come out in March.

    Tesla may be offering the discounts to juice sales before the end of the year in an effort to meet a pledge to grow vehicle sales by 50%.

    On the company’s third-quarter earnings conference call in October, Tesla CFO Zachary Kirkhorn said Tesla will fall just short of its 50% sales growth target. But he later was contradicted by CEO Elon Musk.

    Musk predicted 50% annual production and delivery growth, but also pointed to logistical problems shipping vehicles.

    To reach the 50% sales growth target, Tesla must have a stellar performance in the fourth quarter.

    Through September the company delivered 908,573 vehicles, compared with just over 936,000 vehicles a year ago. To increase sales by 50% over last year, which would amount to about 1.4 million vehicles, the company would have to sell more than 490,000 vehicles in the fourth quarter.

    Industry analysts polled by data provider FactSet expect Tesla to deliver 431,000 vehicles in the fourth quarter, ending the year at 1,341 million.

    Tesla shares have lost more than 60% of their value since Musk announced in April that he had taken a large stake in Twitter. They fell nearly 9% in Thursday, closing at $125.35 after U.S. safety regulators said they would probe two more Tesla crashes possibly involving automated driving systems.

    Eventually Musk bought the social media site, and investors are worried about demand and that the CEO has been distracted from the car company.

    Musk said this week that he plans to remain as Twitter’s CEO until he can find someone willing to replace him in the job.

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  • Rule delay makes big EV tax credit possible early next year

    Rule delay makes big EV tax credit possible early next year

    WASHINGTON — People who want to buy an electric vehicle could get a bigger-than-expected tax credit come Jan. 1 because of a delay by the Treasury Department in drawing up rules for the tax breaks.

    The department said late Monday it won’t finish the rules that govern where battery minerals and parts have to be sourced until sometime in March.

    As a result, it appears that buyers of EVs assembled in North America with batteries made in the U.S., Canada or Mexico will be eligible for a full $7,500 tax credit under the Inflation Reduction Act. The act calls for the batteries’ minerals and parts to also come from North America or a country with a free-trade agreement with the U.S. in order to get the full tax break, but that provision has been temporarily put on hold.

    The auto industry is watching the situation closely, but it could cause a rush to dealers because most, if not all EVs aren’t expected to qualify for the full credit when the rules are all in place.

    Experts say most automakers won’t be able to comply with requirements that the battery components come from North America or a country with a U.S. free-trade agreement. For instance, General Motors already has said that it expects its EVs to get only half the tax credit, or $3,750, until at least 2025.

    So people who buy early next year before the rules are announced could pocket an extra $3,750.

    “I imagine there will be a rush,” on EV dealers to get the extra savings, said Sam Abuelsamid, principal e-mobility analyst with Guidehouse Research.

    In the meantime, Treasury said it will release information by year’s end on the “anticipated direction” of the rules to help automakers identify eligible EVs, the department said in a statement. But the rules won’t be effective until March.

    Other requirements, like new caps on a buyer’s income and price of the EV, will still take effect Jan. 1.

    “It should allow some consumers to get an EV a little bit cheaper than they might have otherwise,” said Chris Harto, a senior policy analyst on transportation and energy for Consumer Reports magazine.

    With a base price of $26,595 including shipping, General Motors’ Chevrolet Bolt hatchback is among the lowest-cost EVs on sale in the U.S. today. A $7,500 tax credit would knock the price down to just over $19,000 — less than the average price of a used vehicle in the U.S. That could bring buyers off the sidelines.

    GM says it’s watching developments with the tax credit rules. “We feel well-positioned, but we’re still waiting on guidance for vehicle eligibility,” spokeswoman Jeannine Ginivan said Tuesday.

    Automakers have criticized the battery sourcing and assembly requirements as complex, hard to trace and unrealistic in the short term, with no EV model sold in the U.S. likely able to qualify right away for the full $7,500 tax credit.

    The law’s aim was in part to reduce U.S. reliance on batteries now predominantly made in China and move supply chains to the U.S. Fifty percent of the battery parts have to be manufactured or assembled in North America, and 40% of battery minerals must come from North America or a country with a U.S. free trade agreement, or recycled in North America. Those percentages rise annually.

    More broadly, U.S. allies including South Korea, the European Union and other countries are also upset, arguing that the new law will disqualify their foreign-made EVs unless or until they can open new American plants, which could take several years.

    The new law continues to require that EVs be assembled in North America, which took effect when President Joe Biden signed the measure in August. Also taking effect on Jan. 1 are new caps that EV sedans must cost $55,000 or less, or under $80,000 for pickup trucks, SUVs and vans. A car buyer must have income of $150,000 or less if single, or $300,000 if filing jointly.

    Abuelsamid said it’s not clear whether someone could order an EV before the rules take effect and still get the full credit. He suspects that people will have a hard time finding EVs, which like other automobiles, are still scarce because the auto industry is having a hard time getting computer chips and other parts to keep factories running.

    Harto said the temporary delay makes sense for the Treasury Department as it sorts out technical issues of minerals extraction and battery component manufacturing for its rule-making. Consumers in the meanwhile can take advantage if they pay heed as well to potential dealer markups, he said.

    “The market for EVs has been supply limited and I don’t see that changing in the next two weeks, so that’s the real risk — that this additional tax credit gets eaten up by dealer markups,” Harto said.

    ———

    Krisher reported from Detroit. Associated Press writer Fatima Hussein contributed to this report.

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  • Trump’s tax returns to be discussed by congressional panel

    Trump’s tax returns to be discussed by congressional panel

    WASHINGTON — The Democratic-controlled House Ways and Means Committee is expected to vote Tuesday on whether to publicly release years of Donald Trump ’s tax returns, which the former president has long tried to shield.

    Committee Chairman Richard Neal, D-Mass., has kept a close hold on the panel’s actions, including whether the panel will meet in a public or private session. And if lawmakers move forward with plans to release the returns, it’s unclear how quickly that would happen.

    But after a yearslong battle that ultimately resulted in the Supreme Court clearing the way last month for the Treasury Department to send the returns to Congress, Democrats are under pressure to act aggressively. The committee received six years of tax returns for Trump and some of his businesses. And with just two weeks left until Republicans formally take control of the House, Tuesday’s meeting could be the last opportunity for Democrats to disclose whatever information they have gleaned.

    Trump has long had a complicated relationship with his personal income taxes.

    As a presidential candidate in 2016, he broke decades of precedent by refusing to release his tax forms to the public. He bragged during a presidential debate that year that he was “smart” because he paid no federal taxes and later claimed he wouldn’t personally benefit from the 2017 tax cuts he signed into law that favored people with extreme wealth, asking Americans to simply take him at his word.

    Tax records would have been a useful metric for judging his success in business. The image of a savvy businessman was key to a political brand honed during his years as a tabloid magnet and star of “The Apprentice” television show. They also could reveal any financial obligations — including foreign debts — that could influence how he governed.

    But Americans were largely in the dark about Trump’s relationship with the IRS until October 2018 and September 2020, when The New York Times published two separate series based on leaked tax records.

    The Pulitzer Prize-winning 2018 articles showed how Trump received a modern equivalent of at least $413 million from his father’s real estate holdings, with much of that money coming from what the Times called “tax dodges” in the 1990s. Trump sued the Times and his niece, Mary Trump, in 2021 for providing the records to the newspaper. In November, Mary Trump asked an appeals court to overturn a judge’s decision to reject her claims that her uncle and two of his siblings defrauded her of millions of dollars in a 2001 family settlement.

    The 2020 articles showed that Trump paid just $750 in federal income taxes in 2017 and 2018. Trump paid no income taxes at all in 10 of the past 15 years because he generally lost more money than he made.

    The articles exposed deep inequities in the U.S. tax code as Trump, a reputed multi-billionaire, paid little in federal income taxes. IRS figures indicate that the average tax filer paid roughly $12,200 in 2017, about 16 times more than the former president paid.

    Details about Trump’s income from foreign operations and debt levels were also contained in the tax filings, which the former president derided as “fake news.”

    At the time of the 2020 articles, Neal said he saw an ethical problem in Trump overseeing a federal agency that he has also battled with legal filings.

    “Now, Donald Trump is the boss of the agency he considers an adversary,” Neal said in 2020. “It is essential that the IRS’s presidential audit program remain free of interference.”

    The Manhattan district attorney’s office also obtained copies of Trump’s tax records in February 2021 after after a protracted legal fight that included two trips to the Supreme Court.

    The office, then led by District Attorney Cyrus Vance Jr., had subpoenaed Trump’s accounting firm in 2019, seeking access to eight years of Trump’s tax returns and related documents.

    The DA’s office issued the subpoena after Trump’s former personal lawyer Michael Cohen told Congress that Trump had misled tax officials, insurers and business associates about the value of his assets. Those allegations are the subject of a fraud lawsuit that New York Attorney General Letitia James filed against Trump and his company in September.

    Trump’s longtime accountant, Donald Bender, testified at the Trump Organization’s recent criminal trial that Trump reported losses on his tax returns every year for a decade, including nearly $700 million in 2009 and $200 million in 2010.

    Bender, a partner at Mazars USA LLP who spent years preparing Trump’s personal tax returns, said Trump’s reported losses from 2009 to 2018 included net operating losses from some of the many businesses he owns through his Trump Organization.

    The Trump Organization was convicted earlier this month on tax fraud charges for helping some executives dodge taxes on company-paid perks such as apartments and luxury cars.

    The current Manhattan district attorney, Alvin Bragg, told The Associated Press in an interview last week that his office’s investigation into Trump and his businesses continues.

    “We’re going to follow the facts and continue to do our job,” Bragg said.

    Trump, who refused to release his returns during his 2016 presidential campaign and his four years in the White House while claiming that he was under IRS audit, has argued there is little to be gleaned from the tax returns even as he has fought to keep them private.

    “You can’t learn much from tax returns, but it is illegal to release them if they are not yours!” he complained on his social media network last weekend.

    Republicans, meanwhile, have railed against the potential release, arguing that it would set a dangerous precedent.

    Rep. Kevin Brady of Texas, the Ways and Means Committee’s Republican leader, accused Democrats on the committee of “unleashing a dangerous new political weapon that reaches far beyond President Trump, and jeopardizes the privacy of every American.”

    “Going forward, partisans in Congress have nearly unlimited power to target political enemies by obtaining and making public their private tax returns to embarrass and destroy them,” Brady said in a statement. “We urge Democrats, in their rush to target former President Trump, not to unleash this dangerous new political weapon on the American people.”

    ———

    Kinnard reported from Columbia, South Carolina. Associated Press writers Michael R. Sisak and Jill Colvin in New York contributed this report.

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  • Clean energy grant fraud results in 7 year prison sentence

    Clean energy grant fraud results in 7 year prison sentence

    BOSTON — A Massachusetts man who participated in a scheme to defraud the U.S. government out of about $50 million in tax-free grants intended to fund clean energy projects has been sentenced to seven years in prison, federal prosecutors said Wednesday.

    Christopher N. Condron, 50, was also sentenced Tuesday in U.S. District Court in Boston to three years of probation and ordered to pay $8.7 million, the amount he actually made in the scheme that ran from 2009 until 2013, according to a statement from the U.S. attorney’s office.

    Condron and others submitted fraudulent grant applications to the U.S. Treasury Department on behalf of four different companies, purportedly involved in either biofuel gasificaton or wind farm projects, prosecutors said.

    The grants were from a program under the American Recovery and Reinvestment Act of 2009, meant to stimulate the U.S. economy after the 2008 recession.

    Condron claimed the companies had either acquired, placed into service, or started construction of the projects at a total cost of more than $170 million, prosecutors said. Condron and others then sought to be reimbursed for more than $50 million based on those inflated costs, authorities said.

    Condron submitted fraudulent documentation to an attorney who, in turn, submitted the applications to the Treasury Department, according to prosecutors.

    Condron, of Acton, was indicted in 2017 and in September 2021 was convicted by a federal jury of conspiracy to defraud the United States and wire fraud. An email seeking comment was sent to his attorneys.

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  • Biden eases Venezuela sanctions as opposition talks resume

    Biden eases Venezuela sanctions as opposition talks resume

    WASHINGTON — The Biden administration on Saturday eased some oil sanctions on Venezuela in an effort to support newly restarted negotiations between President Nicolás Maduro’s government and its opposition.

    The Treasury Department is allowing Chevron to resume “limited” energy production in Venezuela after years of sanctions that have dramatically curtailed oil and gas profits that have flowed to Maduro’s government. Earlier this year the Treasury Department allowed the California-based Chevron and other U.S. companies to perform only basic upkeep of wells it operates jointly with state-run oil giant PDVSA.

    Under the new policy, profits from the sale of energy would be directed to paying down debt owed to Chevron, rather than providing profits to PDVSA.

    Talks between the Maduro government and the “Unitary Platform” resumed in Mexico City on Saturday after more than a yearlong pause. It remained to be seen whether they would take a different course from previous rounds of negotiations that have not brought relief to the political stalemate in the country.

    A senior U.S. administration official, briefing reporters about the U.S. action under the condition of anonymity, said that easing the sanctions was not connected to the administration’s efforts to boost global energy production in the wake of Russia’s invasion of Ukraine and that the decision was not expected to impact global energy prices.

    The official said the U.S. would closely monitor Maduro’s commitment to the talks and reserved the right to reimpose stricter sanctions or to continue to ease them depending on how the negotiations proceed.

    “If Maduro again tries to use these negotiations to buy time to further consolidate his criminal dictatorship, the United States and our international partners must snap back the full force of our sanctions that brought his regime to the negotiating table in the first place,” said Democratic Sen. Bob Menendez of New Jersey, chairman of the Senate Foreign Relations Committee, in a statement.

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