Day: June 11, 2021

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CNH Industrial names designated CEO of On-Highway busines

CNH INDUSTRIAL N.V.

Gerrit Marx President Commercial and Specialty Vehicles CNH Industrial

London, June 11, 2021

As work proceeds apace to deliver the previously announced spin-off of its On-Highway business, CNH Industrial N.V. (NYSE: CNHI / MI: CNHI) has named Gerrit Marx as the designated Chief Executive Officer of the new entity, which is expected to assume independent operations in early 2022.

The new On-Highway business will include the following brands and their respective activities: IVECO (heavy, medium and light commercial vehicles), IVECO ASTRA (heavy-duty trucks), IVECO BUS and Heuliez Bus (buses and coaches), Magirus (firefighting vehicles), Iveco Defence Vehicles (defense and civil protection vehicles), FPT Industrial (powertrain technologies) and Iveco Capital (Financial Services).

Gerrit Marx joined CNH Industrial as President of Commercial and Specialty Vehicles in January 2019. Mr. Marx has some 20ars of experience in roles of increasing importance at organizations which include McKinsey & Company, Daimler AG, Skoda and most recently at global equity firm Bain Capital. He has worked across different geographies and in a variety of industrial segments, with specific, in-depth focus on automotive industries.

“On behalf of the Board of Directors, I wish to congratulate Gerrit on this appointment. We are confident that his expertise in commercial vehicles, together with his demonstrated leadership of our Commercial and Specialty Vehicles segment, will serve him well in taking the new company forward,” said Suzanne Heywood, Chair of the CNH Industrial Board of Directors.

CNH Industrial N.V. (NYSE: CNHI / MI: CNHI) is a global leader in the capital goods sector with established industrial experience, a wide range of products and a worldwide presence. Each of the individual brands belonging to the Company is a major international force in its specific industrial sector: Case IH, New Holland Agriculture and Steyr for tractors and agricultural machinery; Case and New Holland Construction for earth moving equipment; Iveco for commercial vehicles; Iveco Bus and Heuliez Bus for buses and coaches; Iveco Astra for quarry and construction vehicles; Magirus for firefighting vehicles; Iveco Defence Vehicles for defence and civil protection; and FPT Industrial for engines and transmissions. More information can be found on the corporate website: www.cnhindustrial.com

Media contact:

Francesco Polsinelli
Corporate Communications Manager, Europe
CNH Industrial
Tel: +39 335 1776091
Email: mediarelations@cnhind.com

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Nyxoah Issues First Quarter 2021 Results

Mont-Saint-Guibert, Belgium – June 10, 2021, 11:45pm CET / 5:45pm ET – Nyxoah SA (Euronext Brussels: NYXH) (“Nyxoah” or the “Company”), a medical technology company focused on the development and commercialization of innovative solutions to treat Obstructive Sleep Apnea (OSA), today announced its unaudited, interim financial statements for the three months ended March 31, 2021.  In addition, Mr. Janke Dittmer has informed the Company that he will resign from his position as director immediately prior to and contingent upon the completion of an initial public offering in the United States.

First Quarter 2021 Results

  For the three month period ended March 31
(in thousands of EUR) 2021 2020
Revenue                                     185                      —
Cost of goods sold                            (52) —
Gross Profit                                     133                  —
General and administrative expenses (1,818) (1,178)
Research and development expenses (852) (7)
Clinical expenses (342) (177)
Manufacturing expenses (901) (62)
Quality assurance and regulatory expenses (325) (25)
Patents Fees & Related (674) (58)
Therapy Development expenses (548) (352)
Other operating income/(expenses) 4 (191)
Operating loss for the period                              (5,323)               (2,050)
Financial income 4 19
Financial expense (325) (336)
Loss for the period before taxes                           (5,644)               (2,367)
Income Taxes (25) (13)
Loss for the period                           (5,669)               (2,380)
Other comprehensive loss    
Items that may be subsequently reclassified to profit or loss (net of tax)    
Currency translation differences (70) 272
Total comprehensive loss for the year, net of tax                            (5,739)               (2,108)
Loss attributable to equity holders                           (5,739)               (2,108)

Revenue

Revenue was €185,000 for the three months ended March 31, 2021, compared to no revenue for the three months ended March 31, 2020. The increase in revenue was attributable to the Company’s commercialization of the Genio® system in Europe, which began in July 2020.

Cost of Goods Sold

Cost of goods sold was €52,000 for the three months ended March 31, 2021, compared to no cost for the three months ended March 31, 2020. The increase in cost of goods sold was attributable to the sales of the Genio® system in Europe, which began in July 2020.

General and Administrative Expenses. General and administrative expenses increased by €0.6 million, or 54%, from €1.2 million for the three months ended March 31, 2020 to €1.8 million for the three-months ended March 31, 2021 mainly due to an increase in consulting expenses. The increase in consulting and contractors’ fees includes variable compensations for an amount of €253,000 for the three months ended March 31, 2020 and €498,000 for the three-months ended March 31, 2021 related to a cash-settled share based payment transaction.

Research and Development Expenses. Before capitalization of €311,000 for the three months ended March 31, 2020, research and development expenses increased by €0.5 million, or 168%, from €318,000 (or €7,000 after capitalization of €311,000) for the three months ended March 31, 2020 to €0.9 million for the three months ended March 31, 2021, due to an increase in staff and consulting costs to support the Company’s R&D activities.

Clinical Expenses. Before capitalization of €1.4 million for the three months ended March 31, 2021 and capitalization of €568,000 for the three months ended March 31, 2020, clinical expenses increased by €1.1 million, or 139%, from €0.7 million (or €177,000 after capitalization of €568,000) for the three months ended March 31, 2020 to €1.8 million for the three months ended March 31, 2021 (or €342,000 after capitalization of €1.4 million). The increase in the expenses was mainly due to an increase in staff and consulting to support the completion of the BETTER SLEEP trial implantations, continuous recruitment for the EliSA trial and the ongoing DREAM IDE trial in the United States.

Manufacturing Expenses. Before capitalization of €215,000 for the three months ended March 31, 2021 and €578,000 for the three months ended March 31, 2020, manufacturing expenses increased by €0.5 million, or 74%, from €0.6 million (or €62,000 after capitalization of €578,000) for the three months ended March 31, 2020 to €1.1 million (or €901,000 after capitalization of €215,000) for the three months ended March 31, 2021. The increase was mainly due to an increase in staff, in the production and engineering team to support capacity and yield improvement, and in purchasing raw materials to support an increase in production.

Quality Assurance and Regulatory Expenses. Before capitalization of €133,000 for the three months ended March 31, 2021 and €263,000 for the three months ended March 31, 2020, quality assurance and regulatory expenses increased by €170,000, or 59%, from €288,000 (or €25,000 after capitalization of €263,000) for the three months ended March 31, 2020 to €458,000 (or €325,000 after capitalization of €133,000) for the three months ended March 31, 2021. The increase was mainly due to an increase in staff and QA & regulatory activities to support the manufacturing scaling-up process.

Patent Fees & Related Expenses. Before capitalization of €56,000 for the three months ended March 31, 2020, patent fees & related expenses increased by €560,000, or 491%, from €114,000 (or €58,000 after capitalization of €56,000) for the three months ended March 31, 2020 to €0.7 million for the three months ended March 31, 2021 due to expenses related to the in-licensing agreement with Vanderbilt University.

Therapy Development Expenses. Therapy Development expenses increased by €196,000, or 56%, from €352,000 for the three months ended March 31, 2020 to €0.5 million for the three months ended March 31, 2021. The increase in the expenses was mainly due to an increase in staff and consulting to support the launch the commercialization of the Genio® system in Europe.

Other Operating Income / (Expenses). The Company had other operating expenses of €191,000 for the three months ended March 31, 2020 and operating income of €4,000 for the three months ended March 31, 2021. The increase in expenses was mainly due to the impact of the initial measurement and re-measurement of the financial debt.

Operating Loss

The increase of operating loss from €2.1 million for the three months ended March 31, 2020 to €5.7 million for the three months ended March 31, 2021, or a change of €3.3 million, was due to increases of activities in all departments. The Company currently conducting three clinical trials to continue gathering clinical data and obtain regulatory approvals. In June 2020, the Company obtained IDE approval to start the DREAM trial in the United States. In line with this strategy, the Company continues to invest in research and development to improve and develop the next generation of the Genio® system and prepare for scaling-up of production capacities.

Cash Position

Cash and cash equivalents totaled €86.2 million on March 31, 2021, as compared to €92.3 million on December 31, 2020.

Net cash used in operations was €4.2 million for the three months ended March 31, 2021 compared to €1.2 million for the three months ended March 31, 2020. The increase of €3.0 million was primarily due to an increase in a loss for the period of €3.3 million that was mainly attributable to increased general and administrative expenses, research and development expenses, manufacturing expenses and therapy development expenses, which were offset by a positive variation in the working capital of €0.5 million.

Net cash used in investing activities for each of the three months ended March 31, 2021 and the three months ended March 31, 2020 was €1.8 million.

Net cash used in financing activities for the three months ended March 31, 2021 was €104,000 compared to €24.8 million of net cash provided by financing activities during the three months ended March 31, 2020. The decrease was due to a lack of capital increase during the first quarter of 2021.

Outlook for 2021

The Company’s business, operational, and clinical outlook for 2021 include the following expected milestones and goals:

  • Ramp up EU revenue and build a dedicated sales team in Germany
  • Open second independent manufacturing site in Belgium, in addition to existing site in Israel
  • Complete DREAM pivotal trial enrollment

First quarter report 2021
Nyxoah’s financial report for the three months ended March 31, 2021, including details of the unaudited consolidated results, are available on the investor page of Nyxoah’s website (https://investors.nyxoah.com/financials).

About Nyxoah
Nyxoah is a medical technology company focused on the development and commercialization of innovative solutions to treat Obstructive Sleep Apnea (OSA). Nyxoah’s lead solution is the Genio® system, a CE-validated, patient-centered, next generation hypoglossal neurostimulation therapy for OSA, the world’s most common sleep disordered breathing condition that is associated with increased mortality risk and comorbidities including cardiovascular diseases, depression and stroke.

Following the successful completion of the BLAST OSA study in patients with moderate to severe OSA, the Genio® system received its European CE Mark in 2019. The Company is currently conducting the BETTER SLEEP study in Australia and New Zealand for therapy indication expansion, the DREAM IDE pivotal study for FDA approval and a post-marketing EliSA study in Europe to confirm the long-term safety and efficacy of the Genio® system.

For more information, please visit http://www.nyxoah.com/.

Caution – CE marked since 2019. Investigational device in the United States. Limited by U.S. federal
law to investigational use in the United States.

Forward-looking statements
Certain statements, beliefs and opinions in this press release are forward-looking, which reflect the Company’s or, as appropriate, the Company directors’ or managements’ current expectations regarding the Genio® system; planned and ongoing clinical studies of the Genio® system; the potential advantages of the Genio® system; Nyxoah’s goals with respect to the development, regulatory pathway and potential use of the Genio® system; the utility of clinical data in potentially obtaining FDA approval of the Genio® system; and the Company’s results of operations, financial condition, liquidity, performance, prospects, growth and strategies. By their nature, forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties, assumptions and factors could adversely affect the outcome and financial effects of the plans and events described herein. A multitude of factors including, but not limited to, changes in demand, competition and technology, can cause actual events, performance or results to differ significantly from any anticipated development. Forward looking statements contained in this press release regarding past trends or activities are not guarantees of future performance and should not be taken as a representation that such trends or activities will continue in the future. In addition, even if actual results or developments are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in future periods. No representations and warranties are made as to the accuracy or fairness of such forward-looking statements. As a result, the Company expressly disclaims any obligation or undertaking to release any updates or revisions to any forward-looking statements in this press release as a result of any change in expectations or any change in events, conditions, assumptions or circumstances on which these forward-looking statements are based, except if specifically required to do so by law or regulation. Neither the Company nor its advisers or representatives nor any of its subsidiary undertakings or any such person’s officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this press release or the actual occurrence of the forecasted developments. You should not place undue reliance on forward-looking statements, which speak only as of the date of this press release.

For further information, please contact:
Nyxoah
Fabian Suarez, Chief Financial Officer
fabian.suarez@nyxoah.com
+32 10 22 24 55

Gilmartin Group
Vivian Cervantes

vivian.cervantes@gilmartinir.com

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Nyxoah files Registration Statement for Proposed Initial Public Offering in the United States

Nyxoah files Registration Statement for Proposed Initial Public Offering in the United States

Mont-Saint-Guibert, Belgium – June 10, 2021, 11:30pm CET / 5:30pm ET – Nyxoah SA (Euronext Brussels: NYXH) (“Nyxoah” or the “Company”), a medical technology company focused on the development and commercialization of innovative solutions to treat Obstructive Sleep Apnea (OSA), today announced that the Company has publicly filed a registration statement on Form F-1 with the U.S. Securities and Exchange Commission (the “SEC”) relating to a proposed initial public offering of its ordinary shares, which are expected to be listed on the NASDAQ Global Market in the United States.  The number of ordinary shares to be offered and the price for the proposed offering have not yet been determined.

Nyxoah’s ordinary shares are currently listed on Euronext Brussels under the symbol “NYXH”. An application has been made to list the ordinary shares on the NASDAQ Global Market under the same symbol.

Piper Sandler, Stifel and Cantor are acting as joint book-running managers for the proposed offering. Degroof Petercam is acting as a manager.

A registration statement on Form F-1 has been filed with the SEC but has not yet become effective. The ordinary shares may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective. This press release does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification or publication of an offering prospectus under the securities laws of any such state or jurisdiction.

The proposed offering of ordinary shares in the United States will be made only by means of a prospectus. When available, copies of the preliminary prospectus relating to the proposed offering can be obtained from Piper Sandler & Co., Attention: Prospectus Department, 800 Nicollet Mall, J12S03, Minneapolis, Minnesota 55402, by e-mail at prospectus@psc.com, or by phone at (800) 747-3924; Stifel, Nicolaus & Company, Incorporated at Attention: Syndicate, One Montgomery Street, Suite 3700, San Francisco, CA 94104, by telephone at (415) 364-2720, or by email at syndprospectus@stifel.com; or Cantor Fitzgerald & Co., Attention: Capital Markets, 499 Park Avenue, 4th Floor, New York, New York 10022; email: prospectus@cantor.com.

Contacts:

Nyxoah
Fabian Suarez, Chief Financial Officer
fabian.suarez@nyxoah.com
+32 10 22 24 55

Gilmartin Group
Vivian Cervantes
vivian.cervantes@gilmartinir.com

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Layout International Partners with Sophi.io to Fully Automate Print Production

Combining Layout International’s NewsPublish and Sophi.io’s smart AI and ML engine reduces the hours long process of print laydown to just minutes

TORONTO, June 10, 2021 (GLOBE NEWSWIRE) — Sophi.io, a suite of AI-powered optimization, prediction and automation tools developed by The Globe and Mail, has partnered with Layout International, a supplier of cutting-edge enterprise technology, to transform print production. Sophi will provide the smart AI/ML technology to fully automate the end-to-end print production workflow to save publishers time and money and enable them to focus on creating high quality content.

Print laydown is typically a long and arduous process, involving multiple editors and page designers and taking hours to complete. Without the rigid constraints of a template, Layout International customers will now have the opportunity to create a print-ready paper that is indecipherable from a paper prepared by human page designers, and the entire process takes just minutes. And for Layout International’s over 200 customers, this partnership means seamless integration of Sophi into their current NewsPublish editorial workflow.

“We’re excited that working with Sophi.io enables us to offer our customers cutting edge new capabilities in the form of an end-to-end automated print solution that dramatically increases efficiencies. Our customers will be able to run and rerun their print paper in just minutes, whenever they chose, all within the NewsPublish Enterprise content management system that they already use daily,” said Jean-Michel Habis, CEO of Layout International.

The Sophi suite of tools is designed to identify an organization’s most valuable content (not the most popular content, but the content that drives conversions or retention or the metric that matters most to that organization) and place it in the most valuable places across their digital entities, or behind a paywall when the subscription revenue outweighs the predicted advertising revenue. In addition to NewsPublish powered by Sophi.io, Sophi provides site automation, a fully dynamic, real-time, personalized paywall, and analytics solutions to publishers across the world.

“Print laydown is a massive undertaking,” said Greg Doufas, Chief Technology Officer at The Globe and Mail. “We see this partnership with Layout International giving publishers the freedom to focus on content creation and the specific design elements that page designers want to spend their energy on. The best part is that NewsPublish powered by Sophi.io is getting better and smarter every day, so Layout International customers will always be on the cutting edge of technology with this solution.”

To learn more, please visit www.newspublish.org or email sales@layoutintl.com.

About Layout International
Layout International (www.layoutintl.com) meets the growing technological needs in the market by providing highly customizable enterprise solutions. They serve more than 200 clients, supplying them with cutting-edge technology to improve the way they work. They enable many organizations to digitally transform their processes, migrate and integrate to work on a single platform.

Layout International Media Contact
Ghassan Halawi
Vice President of Sales, Layout International
+961 70 855685
ghalawi@layoutintl.com

About Sophi.io
Sophi.io (https://www.sophi.io) is a suite of AI-powered optimization and prediction tools that helps content publishers make important strategic and tactical decisions. Sophi solutions range from Sophi Site Automation and Sophi for Paywalls to Sophi Analytics, a decision-support system for content publishers. Sophi is designed to improve the metrics that matter most to your business, such as subscriber retention and acquisition, engagement, recency, frequency and volume.

Sophi.io Media Contact
Jamie Rubenovitch
Head of Marketing, Sophi.io
The Globe and Mail
416-585-3355
jrubenovitch@globeandmail.com
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British Doctors Union Urges Government Not to Reopen

The main doctors union in Britain is calling on the government to delay its plans to ease coronavirus lockdown restrictions as new data shows a spike in cases of the highly transmissible delta variant.

The British Medical Association said Friday a “sensible delay” would help to stop infections from rising.

Government figures on Friday showed 8,125 new COVID-19 cases, the highest daily total since February. The delta variant, originally identified in India, now accounts for 90% of all new cases in the country.

According to the COVID-19 Roadmap laid out by Prime Minister Boris Johnson’s government, all pandemic-related restrictions are scheduled to be lifted June 21, one week from Monday.

However, in an interview Friday, England’s COVID-19 vaccines minister, Nadhim Zahawi, told Times Radio the nation must be very careful about the opening, given the dominance of the delta variant.

Zahawi said the government should examine the data from this coming weekend very carefully and share it with the nation, and then decide about reopening.

Johnson is expected to announce on Monday whether the planned lifting of restrictions will go ahead.

The Sun newspaper reported Friday that Johnson will hold off on easing the lockdown restrictions.

Meanwhile, Chicago became the largest U.S. city to fully reopen Friday. During a news conference formally announcing the reopening, Mayor Lori Lightfoot told reporters that for more than a year, Chicago residents have endured so much, but they did their part every step of the way.

“You masked up, you got vaxxed up, and now it’s time for you to get up, get out of the house this summer and fully and safely enjoy the events of the best city on the planet, our beloved city of Chicago,” Lightfoot said.

Earlier Friday, leaders from the G-7 nations announced they will donate a billion COVID-19 vaccine doses to low- and medium-income nations. The U.S. will donate 500 million shots, while Britain will donate 100 million doses.

In the United States, the Centers for Disease Control and Prevention said Friday that 64% of Americans 18 and older had had at least one dose of a coronavirus vaccine.

The Associated Press reported Friday that because of slowing demand for vaccinations, some states have stopped new orders for vaccine doses and others have sent millions of doses back to the federal government. States sending vaccines back to the government include Tennessee and North Carolina, even though less than half of their populations have been vaccinated.

In other developments Friday, Malaysia’s government said it would extend a two-week nationwide lockdown by another two weeks because daily infections remain high at more than 6,000.

Sri Lanka also extended its lockdown for another week as deaths from COVID-19 surpassed 2,000 on Friday.

The Johns Hopkins Coronavirus Resource Center said Friday the number of global COVID-19 infections has reached more than 175 million. The U.S. remains the location with the most cases at 33.4 million infections, but India is rapidly catching up with more than 29.3 million infections.

India’s health ministry reported more than 91,000 new COVID-19 cases Friday in the previous 24 hours. Public health officials say they suspect that India’s cases may be undercounted.

Source: Voice of America

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IRS Data Leak Reveals How Little America’s Wealthiest Pay in Taxes

An unprecedented leak of the personal federal tax data of thousands of Americans has turbocharged a debate over wealth inequality in the United States and has tax reform advocates hopeful that a deeper public understanding of how the wealthy avoid taxes will lead to a restructuring of the U.S. tax code.

The data, leaked to the nonprofit journalism organization ProPublica, includes detailed information on the tax filings of thousands of the wealthiest individuals in the country and extends over more than 15 years.

This week, ProPublica used the data to give the nation its first detailed look at the extent to which the wealthiest in the United States are able to live lives of extraordinary privilege and luxury while simultaneously paying low rates of income tax or no income tax at all.

Among the findings is that Amazon founder Jeff Bezos, the wealthiest person in the world, according to Forbes magazine, paid no federal income taxes in 2007 and 2011, and that other billionaires with household names — Warren Buffett, Mark Zuckerberg, George Soros, Michael Bloomberg, Carl Icahn and others — managed to pay very small amounts of taxes to the federal government, or none at all, even in years when their wealth grew by billions of dollars.

Income vs. wealth

It is important to note the difference between “income” and “wealth” for purposes of the tax code. When an individual files a tax return, it is income that the government is measuring — the proceeds of wages, interest and business activities. Wealth, by contrast, encompasses not just money saved from income from labor or interest, but capital holdings — stocks, bonds, real estate — that may appreciate significantly in value but do not produce income until they are sold.

According to the report, the data show that the 25 richest people in the U.S. saw their wealth increase by a combined $401 billion between 2014 and 2018. But over that period, they paid only $13.6 billion in taxes, or about 3.4% of that increase. That’s because they were taxed only on money that counted as income, which in most cases represented only a tiny percentage of the increase in their total net worth over that period.

By contrast, the median U.S. household pays about 14% of annual income in taxes every year. According to ProPublica’s research, over the same five-year period, the wealth of the average American middle-class family increased by about $65,000, largely because of rising home prices. But that increase in wealth was very nearly balanced by the families’ $62,000 in tax payments across those years.

Monetizing unrealized gains

The ProPublica data illustrate how the very wealthy are able to minimize income, even as they continue to spend lavishly.

In brief, the strategy is to borrow money using their wealth as collateral. Oracle founder Larry Ellison, for example, has a $10 billion credit line collateralized by the same amount of Oracle stock in his possession. Because the money drawn from that credit line is considered a loan, not income, Ellison pays no tax on it.

In theory — and probably in practice, experts say — Ellison and others can simply continue rolling over their debt throughout their lifetimes, absorbing the interest costs from the loans but never selling the underlying assets.

Shocking, but not so shocking

The information uncovered by ProPublica was shocking insofar as individuals’ tax data are very closely held by the Treasury Department and are virtually never released publicly. However, the degree to which the very wealthy are able to avoid paying taxes and the methods they use to do so were not particularly surprising to those who study the tax code.

“Tax scholars thought that this was the way it worked — that they have large assets, and they borrow because the incentives to do so are gigantic,” said Zachary D. Liscow, an associate professor at Yale Law School. “We already knew that. It’s public information when they sell [their shares], and they just haven’t sold that much. Yet they live these lavish lifestyles, which suggests that they are borrowing.”

“I think it’s a big wake-up call,” said Steve Wamhoff, director of federal tax policy for the Institute on Taxation and Economic Policy in Washington.

“It tells us things that tax experts have already known for a long time. But it’s the amount of detail, the specific names, that we don’t normally see,” Wamhoff said. “Even though we know really wealthy people have all kinds of ways to avoid taxes, there’s something about seeing actual names and actual numbers that brings that into sharper focus, and makes people think about what a problem that is, and what we can do to fix it.”

Reason not to sell

There are very obvious reasons why the owners of large paper fortunes prefer not to realize their gains by selling their holdings. The appreciation of the stock would be subject to taxes, immediately wiping out a substantial amount of their wealth.

However, if a wealthy individual holds on to stocks until death, the person’s heirs are able to inherit the holdings at their present value — a practice known as a “step-up-in-basis” — that essentially erases any tax liability that the appreciated shares had come to represent for the deceased.

In this scenario, the heirs can then sell some of the shares with little or no paper gain, use the proceeds to pay off the estate’s outstanding loans and whatever estate taxes are due, and start the whole process over again.

Policy implications

The wealthiest Americans are sitting on $2.7 trillion in unrealized capital gains, according to Emmanuel Saez and Gabriel Zucman, economists at the University of California-Berkeley.

If there are $2.7 trillion in unrealized capital gains that could somehow be subject to income tax — particularly at the 39.6% marginal rate that President Joe Biden’s administration supports — that would translate into more than $1 trillion in revenue for the federal government.

“That is a large share of the federal budget,” Liscow said. “The scope for what could be funded, or the taxes that could be reduced to middle-class families, is gigantic.”

Tax proposals

Exactly how to get at that money, though, is unclear. The kind of wealth tax that many on the left are interested in implementing has proven hopelessly complicated to administer in other advanced economies, like France.

Another option — taxing the wealthy on the money they take in via loans against their holdings — would require substantial revision to the tax code.

What advocates are most hopeful about is that the ProPublica revelations will add momentum to a push to do away with the stepped-up-basis enjoyed by the heirs of the ultrawealthy. The Biden administration has proposed just such a move alongside its budget request.

“So, at least all of that would be taxed, eventually, under the Biden proposal,” said Wamhoff, “which is the very minimum that we can do to crack down on this.”

Pessimistic note

However, Liscow said he was doubtful that the revelations would spur any other major reforms in tax policy.

In May, he and Edward G. Fox, an assistant professor at the University of Michigan Law School, released a draft of a paper documenting a survey of approximately 5,000 people, done to gauge support for how the United States taxes returns on investment. The results found broad support for a system that taxes gains only after they are realized.

Even when presented with a scenario mirroring the ProPublica report, in which a wealthy individual borrows against large unrealized gains, a majority of respondents did not support the idea of levying a tax on the borrowed funds.

While he said he personally thought the very wealthy should pay more, Liscow said, “Am I hopeful that this will substantially move the needle? No, I’m not.”

Source: Voice of America