Happy Tuesday and welcome to On The Money, your nightly guide to everything related to your bills, bank account, and bottom line. Subscribe here.
Today’s big deal: The Russian-Ukrainian conflict could lead to food shortages and push prices ever higher. We’ll also look at Senate action against another Fed nominee, Biden’s estate tax overhaul, and an FTC lawsuit accusing TurboTax of misleading consumers.
But first, see which states side with Will Smith.
Russia’s invasion raises fears of rising food prices in the United States
Russia’s invasion of Ukraine raises fears of a global food shortage that could drive up prices for American consumers and trigger a humanitarian crisis in the Middle East.
Commodity prices have soared since Russia launched its invasion, traders fearing that Russia’s attacks on Ukrainian infrastructure and the takeover of key ports could prevent Ukraine from exporting its crops for an extended period.
If the war rages and prices remain high, the cost of bread, cereal, pizza, pasta and other foods in the United States could skyrocket, hitting consumers again after grocery store prices rose 8.6% on the year, the largest annual increase in four decades. .
“Over the next few months, if Ukrainian farmers are unable to sow their crops as spring approaches, and we look forward to a whole year without a quarter of the world’s wheat supply, this is going to have an impact significant impact on prices,” said Robb MacKie, president and CEO of the American Bakers Association.
- Ukraine is the world’s largest exporter of sunflower oil, the fifth largest exporter of wheat and one of the main exporters of corn. Together, Russia and Ukraine account for 29% of global wheat sales and the bulk of wheat imports to Middle Eastern countries.
- The country recently exported relatively small amounts of grain by rail for the first time since the start of the conflict. But with Russia controlling the country’s southern ports, Ukraine remains cut off from the Black Sea, its main trade route.
- The consequences will be far worse for Middle Eastern countries like Afghanistan, Lebanon and Yemen that rely on Ukraine for the bulk of their wheat imports and are already struggling with widespread hunger.
The Biden administration hopes U.S. farmers will increase wheat production to take advantage of higher prices. But it’s a risky bet because fertilizers, often imported from Russia and Belarus, are becoming more expensive than ever.
Karl details the potential food shortage here.
NOW WE COOK
Senate advances Fed nominee after committee deadlock
The Senate voted along party lines on Tuesday to advance the nomination of Michigan State University professor Lisa Cook to the Federal Reserve Board after a committee blocked her nomination earlier this month.
The background: Cook’s nomination was put on hold in March after the Senate Banking Committee voted 12 to 12, also along party lines, to advance his nomination to the full Senate. The panel approved Biden’s renomination as Fed chair Jerome PowellJerome PowellOn The Money – Russia’s war could drive up global food prices Senator Cook advances Fed nominee past committee deadlockhis nomination of Fed Governor Lael Brainard as vice chairman and the nomination of Davidson College professor Philip Jefferson to the Fed board on March 16, but tied with Cook.
What happens after: Powell and Jefferson are almost certain to be confirmed, and Brainard has already won bipartisan support. Cook, however, faces a narrow margin of confirmation in the face of unanimous Republican opposition.
Sylvan explains here.
FTC sues Intuit over TurboTax ‘free’ filing ad campaign
The Federal Trade Commission (FTC) announced on Tuesday that it is suing Intuit, the owner of TurboTax, for allegedly misleading consumers with “fake” advertisements offering free tax returns that millions of Americans are not eligible for.
The FTC is also asking a federal court to immediately end “misleading advertising,” the agency said in a statement.
- The agency argues that TurboTax has for years run misleading advertisements leading consumers to believe they can file taxes for free through the company, when in fact two-thirds of filers in 2020 could not qualify for the free deposit.
“TurboTax bombards consumers with ads for ‘free’ tax filing services, then hits them with fees when it’s time to file,” Samuel Levine, director of the Consumer Protection Bureau, said in a statement. “We’re asking a court to immediately stop this bait and change and protect taxpayers at the height of filing season.”
Hill’s Brad dress has more here.
CLOSE THE FAULTS
White House ‘Billionaires Tax’ Hides Other More Powerful Tax Changes
As the Biden administration touted its new proposal for a minimum household income tax worth more than $100 million, estate lawyers on Monday were paying attention to a more technical but also powerful package. of proposed revisions to inheritance and gift taxes that would go after inherited caches of wealth long kept out of the reach of tax collectors.
The changes aim to downgrade the sophisticated types of shelters available to the ultra-rich and their financial engineers that allow stacks of cash worth billions of dollars to go untaxed over centuries.
“It’s very subtle in the green book, and it doesn’t seem to be what [the Biden administration] promotes, but I’ve seen the language, and it’s serious,” said Daniel Hemel, a law professor at the University of Chicago. “These changes would take the juice out of estate tax planning. »
- The Biden proposal would limit the number of generations who can take advantage of a loophole that allows large sums of estate money to go untaxed forever, and crack down on another similar tax avoidance scheme.
- The budget is largely symbolic, but tax lawyers say Biden’s most recent proposals are much more expressly targeted than similar measures proposed last year.
Tobias Burns of The Hill has more here.
Good to know
Inflation, which is at its highest level in 40 years, tops the list of Americans’ economic concerns in a new poll.
The Gallup survey released on Tuesday found that 17% of respondents cited inflation as their biggest economic problem, rising from 8% in January to 10% last month. Almost 6 in 10 respondents – 59% – said they were now very worried about the cost of living.
Here’s what else we’ve got our eyes on:
That’s all for today. Thanks for reading and check out The Hill’s Finances page for the latest news and coverage. Well see you tomorrow.