Is a Wealth Tax Closer to Reality or a Daydream?

Money

Is a Wealth Tax Closer to Reality or a Daydream?

What’s going on: California dreamin’ might’ve reached new heights — at least when it comes to the ballot. The state’s health care workers’ unions want to push through an initiative in the November election to impose a one-time 5% tax on billionaires’ assets. The move could offset expected Medicaid cuts and promises a big payoff — about 255 billionaires call California home. They’re not the only ones thinking about going after the money. NYC Mayor Zohran Mamdani (D) is considering two budget options: Tax his city’s wealthiest residents and corporations or raise the property tax on working- and middle-class residents. Meanwhile, the governors of Rhode Island and Washington (one of the nine states without an income tax) are weighing levies on their richest residents to help close budget deficits. 

What it means: As for whether or not these proposals will make it across the finish line, don’t hold your breath. States are worried about people relocating. Tech billionaires, including Palantir co-founder Peter Thiel, are already threatening to leave California, and take jobs with them (some already have). That might be enough to convince some voters to mobilize against these tax plans. But something will have to change sooner or later. The wealthiest households are propping up the US economy, even as the wealth gap continues to grow — potentially spelling trouble for the rest of us if they stop spending. 

Related: We Are All Living in the “Boomcession” (CNBC)

The News in 5

🗞️ Last week, the FDA rejected Moderna’s flu vaccine. This week, it’s a different story. 

🗞️ Democrats plan to skip President Donald Trump’s State of the Union speech for this. Doesn’t sound like a simple scheduling issue. 

🗞️ Folks, we have a new acting director of the Centers for Disease Control and Prevention… and he was once an outspoken critic of the agency. 

🗞️ Officials in the UK have arrested former Prince Andrew on suspicion of misconduct in public office following accusations he may have shared confidential information with Jeffrey Epstein.

🗞️ Lawyers questioned Mark Zuckerberg about social media’s addictive qualities for teens. It went so well that, at one point, the Meta CEO said, “I think I’m actually well known to be sort of bad at this.”

Money

This Fed Is Making a Counteroffer

What’s going on: Big banks have kept mortgages at arm’s length for years. But the Fed hopes to change that. Vice Chair for Supervision Michelle Bowman outlined a plan earlier this week for banks to set aside less money to cover potential mortgage losses — among other potential changes, according to The Wall Street Journal. After the 2008 financial crisis, megabanks like JPMorgan Chase and Wells Fargo pulled the old “it’s not you, it’s me,” move. Regulators required them to hold more cash in reserve, which made mortgages less attractive. Nonbank lenders like United Wholesale Mortgage and Rocket stepped in and now handle most US home loans. Bowman hopes the proposed changes could bring banking giants back into the fold.

What it means: Go see that house on Zillow you’ve already mentally moved into if there’s a showing. This is just a proposal and nothing is likely to change overnight. For now, banks and nonbank lenders offer roughly the same rates. But fees? Those can vary — a lot. Still, more players in the market could mean more options, and Bowman has argued consumers lost out when big banks stepped back. That’s because nonbank lenders don’t provide the safety nets traditional banks have, meaning no emergency government loans during a crisis. Exhibit A: During the pandemic, bank borrowers were more likely to receive forbearance than those without. So, more competition could also mean you’re not left hanging when things go sideways.

Related: Why Affordable Cars Are Disappearing Fast (CNN)

Shopping

The Great Beauty Counter Collapse

What's going on: In recent years, we’ve heard plenty of Very Bad News about the downturn of malls and department stores. Online shopping drove much of that decline. But another crack has formed, this time at the beauty counter. You probably remember the first time your mom took you to the Clinique counter for your first makeup tutorial (and your first-ever spritz of Happy). That experience offered an early taste of the luxury beauty world — with department stores largely gatekeeping which brands were worth coveting. These days, people get makeup and skincare tips from influencers or beauty giants like Sephora and Ulta. And we still, sorta, get that free gift with purchase.

What it means: Some US storefronts are holding on to their beauty counters — but the overall picture is bleak. Still, it’s worth asking: Is their decline all that bad? For every nostalgic memory those kiosks brought, there are dozens more horror stories about color-matching or aggressively pushy salespeople. Bottom line: When it comes to beauty, everyone is trying to sell something. Shop in stores, online, or try a combo of the two. Gatekeepers and influencers come and go, but your taste doesn’t have to.

Related: Etsy Just Sold Depop — and the New Owner Will Sound Very Familiar (The Guardian)

On Our Calendar

A few things to jot down today…

🗓️ President Donald Trump holds his inaugural Board of Peace meeting, with Gaza on the agenda. But who’s attending and who isn’t might be just as interesting. 

🗓️ Watch the women’s single free skate event at the Olympics, starting at 1 pm ET on NBC and Peacock. This will be us.

🗓️ Univision’s Premio Lo Nuestro airs at 7 pm ET. Bad Bunny could win big, with 10 noms.

Psst…For more dates worth knowing this week, check out the Skimm+ calendar.

Tiny Upgrades Week

This week isn’t about huge purchases. It’s about making small adjustments that lead to long-term change. We focused on four categories: home, beauty, wardrobe, and routine to hopefully help you upgrade and streamline. Check out:

• The most detailed planner we could find

• The most basic base layer for every outfit

• Tons of affordable beauty products that’ll become nonnegotiables

• And more upgrades to browse at your leisure

Know It All

One man sued Buffalo Wild Wings for saying boneless wings are considered a "wing." How did a judge just rule?

Skimm'd by: Rashaan Ayesh, Mallory Simon, Molly Longman, Maria del Carmen Corpus, and Kylie McConville. Fact-checked by Sara Tardiff.