Treasury Secretary Janet Yellen said President Joe Biden favours boosting taxes on companies, and signalled openness to considering raising rates on capital gains, while steering clear of a wealth levy.
“A wealth tax has been discussed but is not something President Biden” favours, Yellen said at a virtual conference on Monday hosted by the New York Times. She said such a tax would have significant implementation problems.
The administration is looking to boost the corporate tax to 28 per cent, Yellen said. The Treasury chief said last week that revenue measures would be needed to help pay for Biden’s planned longer-term economic reconstruction program to help address concerns about debt sustainability.
Yellen also said that a hike in the capital-gains tax might be something “worth considering.” Asked about a financial-transactions tax, she said, “One would have to examine closely what effect it would have” on ordinary investors. Turning to climate change, which is set to be a new focus for the Treasury, Yellen said the department may be able to help coordinate climate-related stress tests on banks and insurers -- through the Federal Reserve or other regulators.
The Fed already conducts tests to address vulnerability to economic or market downturns, and uses the results as a basis for financial institutions’ capital requirements. Any climate-related tests aren’t expected to have the “same status in terms of limiting payouts and capital” as the regular assessments, Yellen said Monday.
Asked whether the Treasury would consider issuing a 100-year bond to take advantage of low yields, Yellen noted that the government already sells long-term debt. While the Treasury could look again at new securities, market professionals think the demand for a 100-year bond “would be very tiny.” It would “probably be a very thin market,” she said.
The current longest-dated Treasury note is a 30-year security. Yellen also said that she hadn’t anticipated an offer by Biden to become Treasury secretary, at a time when she was focusing on research while working at the Brookings Institution.
“I don’t think that Bitcoin is widely used as a transaction mechanism,” Yellen said. “It’s an extremely inefficient way of conduction transactions and the amount of energy that’s consumed in processing those transactions is staggering.” Her remarks added fuel to the fire and was one of the main reasons for a drastic fall in Bitcoin levels.
The world’s largest cryptocurrency has been on a tear this month, propelled by purchases from Musk’s Tesla and institutional investors who say Bitcoin is an attractive alternative to gold and the dollar.
With inputs from NYT, Reuters