Tesla’s (TSLA) Optimus robots have come a long way from their often-mocked introduction in 2021 when a human dressed in a costume appeared onstage for a demonstration. However, while the overall design has changed between the first and second generations of the humanoid bot, it still doesn’t look very personable.

Read more...

BYD’s (BYDDY) American depositary receipts jumped 2.6% after the EV maker unveiled a new charging system that it said will allow its cars to add enough charge in five minutes to travel 292 miles (470 kilometers), only slightly longer than it takes to refuel a gasoline-powered car.

Read more...

Nigel Farage loves Donald Trump. The 60-year-old’s day job is as the parliamentary representative for the English seaside town of Clacton, and as the leader of Reform, the latest of his populist right-wing parties. But Farage is often focused on America, and his heavily advertised friendship with the 47th president. He was in Washington, D.C., for the inauguration (and chafing that he didn’t get a prime spot in the Capitol Rotunda). He was also onstage last month at the Conservative Political Action Conference, joking to his American audience that “you gave us ‘woke,’ and we gave you Prince Harry.”

As the leader of a party with fewer than half a dozen members of Parliament, Farage knows that his American profile gives him a grandeur he would not otherwise possess. In December, he posed with Elon Musk at Mar-a-Lago under a portrait of a young Trump in cricket whites. Days after Trump survived an assassination attempt in July, Farage flew to the United States on a mission funded by a wealthy Reform donor. On his parliamentary financial-disclosure form, Farage recorded the purpose of his trip as being “to support a friend who was almost killed and to represent Clacton on the world stage.” Lucky Clacton.

But now Farage’s embrace of Trump has become a liability. The 47th president is broadly unpopular in Britain, where Farage hopes to improve the 14.3 percent vote share he received in last year’s election. (He likely needs to at least double that proportion if he wants to be prime minister one day.) Even worse for him, Trump’s MAGA movement is seen as overtly racist and pro-Russia, two huge turnoffs for the majority of British voters. Even Britain’s right-wing newspapers were outraged by Trump’s shabby treatment of Ukrainian President Volodymyr Zelensky in the Oval Office, while Reform’s existing voters are already outliers in their sharply anti-immigration views. Heading further to the right is not a winning strategy in Britain.

Or elsewhere, really. “The populist right around the world has a MAGA problem,” Sunder Katwala, the director of the think tank British Future, told me. “There is a backfire effect in countries that aren’t America.”

[Anne Applebaum: The rise of the brutal American]

Key figures in Trumpworld, such as Musk and Steve Bannon, continually urge European populists to take more extreme positions on race, immigration, and cultural issues. Hard-liners usually point to the success of the German far-right party AfD (known in English as Alternative for Germany), which placed second in the country’s recent elections, its best showing ever. Musk had enthusiastically endorsed the AfD’s leader, Alice Weidel, and he celebrated the result with a personal phone call to her.

In truth, the AfD did not achieve the electoral breakthrough its leaders hoped for. Although conditions were perfect for a populist surge—Germany’s economy is stagnant, and a car attack by an Afghan refugee 10 days before the vote helped keep immigration at the forefront of the national conversation—the AfD struggled to gain a foothold outside the former East Germany. Other parties still refuse to include it in coalition talks. By dabbling in German politics, Trumpworld’s second-most-powerful figure hurt his own business interests while being at best irrelevant to the AfD’s performance. The party “got nothing out of Musk’s backing,” Katwala told me. “It transformed Tesla’s reputation in Germany, but did nothing for the AfD.”

Ultimately, Trump’s fundamental positions have limited appeal to most European electorates. His abandonment of Ukraine is so unpopular in Europe that Italian Prime Minister Giorgia Meloni and the French far-right leader Marine Le Pen—two natural MAGA sympathizers—have carefully distanced themselves from it.

As MAGA becomes ever more extreme, allies such as Farage must decide how far to go along with it—in the knowledge that, if they do not oblige, their domestic rivals will. The Reform leader has just fallen out with one of his five MPs, in a drama precipitated by (who else?) Musk, which played out on (where else?) X. Back in January, Trump’s “first buddy” declared his support for the agitator Tommy Robinson, whom Musk credited with publicizing the so-called grooming gangs of men, mostly British citizens of Pakistani descent, who raped and trafficked girls in towns across England. But Farage recognizes Robinson for what he is: a rabble-rouser with numerous criminal convictions. When the Reform leader repeated his long-standing refusal to admit Robinson to his party, Musk declared that Farage “doesn’t have what it takes.”

[Read: Elon has appointed himself king of the world]

Musk’s preferred alternative to lead Reform was Rupert Lowe, a 67-year-old who used to be chairman of a soccer club. Lowe’s day job is representing another English seaside town, Great Yarmouth, in Parliament. But his passion is posting on X. His disclosure forms show that he now makes about $4,000 a month from pumping out spicy takes on Musk’s social network, and all the attention appears to have gone to Lowe’s head. He recently told the Daily Mail that Farage saw himself as a “Messiah” and that Reform risked being a “protest party” unless its leader surrounded himself with good people. By enormous coincidence, soon after the interview was published, Lowe was suspended from Reform for alleged HR violations.

Cast out from Farage’s party, Lowe has since become even more extreme—a known side effect of spending too much time on social media. He wants the families of grooming-gang offenders deported from Britain, not just men convicted of crimes—and perhaps even “entire communities” of British Pakistanis, who he says have ignored the problem. (The white police officers and social workers who might face the same accusation do not appear to bother him.) Lowe claims that his party leader tried to stop him from expressing these views, an assertion that I instinctively believe; Farage, sometimes known as the father of Brexit, has succeeded in disrupting British politics because he knows when a dog whistle is preferable to a whistle. He has repeatedly forced out people from his various parties when their inflammatory rhetoric tipped into overt extremism. In 2018, he left the U.K. Independence Party after it appointed Robinson as an adviser.

Farage has a winning formula, Katwala believes: be guided by the British press. “If the Mail and The Telegraph think the candidate has a racism problem, ditch them,” he said, referring to two right-leaning papers. “If it’s just The Guardian”—which leans left—“you’re fine.” In the U.S., however, any such boundaries have collapsed. The breadth of permitted opinion, Katwala said, “goes all the way out to the Proud Boys”—the far-right group whose leader was jailed for his part in the Capitol insurrection, and then pardoned by Trump.

Voters outside the United States have one more objection to the MAGA movement: Trump and his allies talk about other countries in a profoundly alienating way. “America First”? Fine, but not “America Thinks Your Tin-Pot Country Is a Joke.” The toxic combination of Trump’s pro-Russia leanings, Vice President J. D. Vance’s arrogance and condescension, and Musk’s sad case of advanced poster’s disease have tanked America’s reputation among its traditional allies.

The exultant right-wing influencers who cheer on MAGA’s sassy clapback anti-diplomacy should remember that insulting another country’s politicians is like insulting someone else’s family. I can be rude about my sister, but you can’t. The Trump administration has revived almost every negative stereotype that Europeans have about Americans: too loud, too brash, too big. Vance, who lectures U.S. allies about how to run their affairs, reminds us of every rich guy from suburban Pittsburgh who visits the Amalfi Coast in the summer, drives up the pedestrianized streets, and then complains that the pasta is too chewy and there’s no AC in his 15th-century villa.

As a result, even formerly bloodless technocrats have found new vigor when being picked on by the Trump administration. So far, the net effect of MAGA foreign policy has been to get exactly zero concessions from Moscow, while simultaneously reviving the fortunes of Canada’s Liberal Party and helping the mainstream center-right win in Greenland. The new prime minister of Canada, the former central banker Mark Carney, was able to appeal to voters’ patriotism when rebutting Trump’s demand to annex his country, and his punitive tariffs. “Americans should make no mistake—in trade, as in hockey, Canada will win,” Carney said, after taking over the Liberal leadership from Justin Trudeau. The Liberals have been able to stop their opponent Pierre Poilievre’s momentum by painting him as a MAGA lackey. “A person who worships at the altar of Donald Trump will kneel before him, not stand up to him,” Carney said.  

Friedrich Merz, the leader of Germany’s center-right Christian Democrats, has been similarly energized. During a televised debate ahead of the recent German elections, he attacked the AfD for drawing support from the MAGA movement, painting his rivals as unpatriotic. “The interventions from Washington were no less dramatic and drastic and ultimately outrageous than the interventions we have seen from Moscow,” he added.

Ben Ansell, a University of Oxford politics professor, believes that MAGA’s sympathy for Moscow has given Europe’s mainstream politicians a potent attack line. “We may finally be witnessing the moment of hubris for the past decade’s unstoppable rise of populism,” he wrote in a recent Substack post. When mainstream politicians attack conservative populists, the latter can easily shrug off any criticism as the revenge of elites. “Populists who actually side with an existing foreign enemy, though? Well, that clarifies matters. Now every decision the populist takes can be tied to the foreign enemy.” In recent weeks, Farage’s approval ratings have noticeably fallen.

[Read: How not to hand populists a weapon]

“If you’re being directly attacked by Trump and you have your own elections, it’s hard to imagine being very successful in those elections by saying: Yes, please,” Ansell told me. Farage is plainly struggling to balance his desire to be close to MAGA with his domestic ambitions.

Populist parties define themselves as being against the status quo and the mainstream, but many of their members (and voters) hold eclectic and divergent views on economics and other issues. “These parties are more fragile than people have thought, and now you have this little lever that mainstream parties can use to split them apart—their closeness to much hated figures,” Ansell told me. European voters have long been wary of Moscow’s intentions. What’s new is a sense that the people now running the United States have lined up with Russia—and against Europe. “Vladimir Putin has been around for a quarter of a century,” Ansell said. “It’s Musk and Trump.”

Populists outside America might love the reflected glow of MAGA’s power and success, but being linked to the Trump administration means tethering themselves, in the eyes of their home audiences, to an unpopular president, his unpopular celebrity adviser, his unpopular stance on Ukraine, and his unpopular bullying tactics. That is populists’ MAGA problem—and the mainstream’s opportunity to fight back.

America’s superrich have always found ways to avoid paying taxes, but in recent years, they’ve discovered what might be the mother of all loopholes. It’s a three-step process called “Buy, Borrow, Die,” and it allows people to amass a huge fortune, spend as much of it as they want, and pass the rest—untaxed—on to their heirs. The technique is so cleverly designed that the standard wish list of progressive tax reforms would leave it completely intact.

Step one: buy. The average American derives most of their disposable income from the wages they earn working a job, but the superrich are different. They amass their fortune by buying and owning assets that appreciate. Elon Musk hasn’t taken a traditional salary as CEO of Tesla since 2019; Warren Buffett, the chair of Berkshire Hathaway, has famously kept his salary at $100,000 for more than 40 years. Their wealth consists almost entirely of stock in the companies they’ve built or invested in. The tax-law scholars Edward Fox and Zachary Liscow found that even when you exclude the 400 wealthiest individuals in America, the remaining members of the top 1 percent hold $23 trillion in assets.

Unlike wages, which are taxed the moment they are earned, assets are taxed only at the moment they are sold—or, in tax terms, “realized.” The justification for this approach is that unrealized assets exist only on paper; you can’t pay for a private jet or buy a company with stocks, even if they have appreciated by billions of dollars. In theory, the rich will eventually need to sell their assets for cash, at which point they will pay taxes on their increase in wealth.

That theory would be much closer to reality if not for step two: borrow. Instead of selling their assets to make major purchases, the superrich can use them as collateral to secure loans, which, because they must eventually be repaid, are also not considered taxable income. Larry Ellison, a co-founder of Oracle and America’s fourth-richest person, has pledged more than $30 billion of his company’s stock as collateral in order to fund his lavish lifestyle, which includes building a $270 million yacht, buying a $300 million island, and purchasing an $80 million mansion. A Forbes analysis found that, as of April 2022, Musk had pledged Tesla shares worth more than $94 billion, which “serve as an evergreen credit facility, giving Musk access to cash when he needs it.”

This strategy isn’t as common among the merely very rich, who may not have the expensive tastes that Ellison and Musk do, but it isn’t rare either. Liscow and Fox calculated that the top 1 percent of wealth-holders, excluding the richest 400 Americans, borrowed more than $1 trillion in 2022. And the approach appears to be gaining momentum. Last year, The Economist reported that, at Morgan Stanley and Bank of America alone, the value of “securities-backed loans” increased from $80 billion in 2018 to almost $150 billion in 2022. “The real question is: Why would you not borrow hundreds of millions, even billions, to fund the lifestyle you want to live?” Tom Anderson, a wealth-management consultant and former banker who specializes in these loans, told me. “This is such an easy tool to use. And the tax benefits are massive.”

[Annie Lowrey: Trump says his tax plan won’t benefit the rich—he’s exactly wrong]

You might think this couldn’t possibly go on forever. Eventually, the rich will need to sell off some of their assets to pay back the loan. That brings us to step three: die. According to a provision of the tax code known as “stepped-up basis”—or, more evocatively, the “angel of death” loophole—when an individual dies, the value that their assets gained during their lifetime becomes immune to taxation. Those assets can then be sold by the billionaire’s heirs to pay off any outstanding loans without them having to worry about taxes.

The justification for the stepped-up-basis rule is that the United States already levies a 40 percent inheritance tax on fortunes larger than $14 million, and it would be unfair to tax assets twice. In practice, however, a seemingly infinite number of loopholes allow the rich to avoid paying this tax, many of which involve placing assets in byzantine legal trusts that enable them to be passed seamlessly from one generation to the next. “Only morons pay the estate tax,” Gary Cohn, a former Goldman Sachs executive and the then–chief economic adviser to Donald Trump, memorably remarked in 2017.

“All of this is completely, perfectly legal,” Edward McCaffery, the scholar who coined the term Buy, Borrow, Die, told me. But, he said, the strategy “has basically killed the entire concept of an income tax for the wealthiest individuals.” The tax economist Daniel Reck, who has spent his career documenting the various ways the rich evade taxation, told me that Buy, Borrow, Die is “the most important tax-avoidance strategy today.” The result is a two-tiered tax system: one for the many, who earn their income through wages and pay taxes, and another for the few, who accumulate wealth through paper assets and largely do not pay taxes.

Much of the debate around American tax policy focuses on the income-tax rate paid by the very wealthiest Americans. But the bulk of those people’s fortunes doesn’t qualify as income in the first place. A 2021 ProPublica investigation of the private tax records of America’s 25 richest individuals found that they collectively paid an effective tax rate of just 3.4 percent on their total wealth gain from 2014 to 2018. Musk paid 3.3 percent, Jeff Bezos 1 percent, and Buffett—who has famously argued for imposing higher income-tax rates on the superrich—just 0.1 percent.

The same dynamic exists, in slightly less egregious form, further down the wealth distribution. A 2021 White House study found that the 400 richest American households paid an effective tax rate of 8.2 percent on their total wealth gains from 2010 to 2018. Liscow and Fox found that, excluding the top 400, the rest of the 0.1 percent richest individuals paid an effective rate of 12 percent from 2004 to 2022. (Twelve percent is the income-tax rate paid by individuals who make $11,601 to $47,150 a year.)

One solution to this basic unfairness would be to tax unrealized assets. In 2022, the Biden administration proposed a “billionaire minimum tax” that would have placed a new annual levy of up to 20 percent on the appreciation of even unsold assets for households with more than $100 million in wealth. Experts have vehemently debated the substantive merits of such a policy; the real problem, however, is political. According to a survey conducted by Liscow and Fox, most Americans oppose a tax on unrealized gains even when applied only to the richest individuals. The Joe Biden proposal, perhaps unsurprisingly, went nowhere in Congress. Making matters more complicated, even if such a policy did pass, the Supreme Court would very likely rule it unconstitutional.

[James Kwak: The tax code for the ultra-rich vs. the one for everyone else]

A second idea would be to address the “borrow” step. Last year, Liscow and Fox published a proposal to tax the borrowing of households worth more than $100 million, which they estimated would raise about $10 billion a year. The limitation of that solution, as the authors acknowledge, is that it would not address the larger pool of rich Americans who don’t borrow heavily against their assets but do take advantage of stepped-up basis.

That leaves the “die” step. Tax experts from across the political spectrum generally support eliminating the “stepped-up basis” rule, allowing unrealized assets to be taxed at death. This would be far more politically palatable than the dead-on-arrival billionaire’s minimum tax: In the same survey in which respondents overwhelmingly opposed broad taxes on unrealized assets during life, Liscow and Fox also found that nearly two-thirds of them supported taxing unrealized assets at death.

Even a change this widely supported, however, would run up against the iron law of democratic politics: Policies with concentrated benefits and distributed costs are very hard to overturn. That’s especially true when the benefits just so happen to be concentrated among the richest, most powerful people in the country. In fact, the Biden administration did propose eliminating stepped-up basis as part of its Build Back Better legislation. The move prompted an intense backlash from special-interest groups and their allied politicians, with opponents portraying the provision as an assault on rural America that would destroy family farms and businesses. These claims were completely unfounded—the bill had specific exemptions for family businesses and applied only to assets greater than $2.5 million—but the effort succeeded at riling up enough Democratic opposition to kill the idea.

The one guarantee of any tax regime is that, eventually, the rich and powerful will learn how to game it. In theory, a democratic system, operating on behalf of the majority, should be able to respond by making adjustments that force the rich to pay their fair share. But in a world where money readily translates to political power, voice, and influence, the superrich have virtually endless resources at their disposal to make sure that doesn’t happen. To make society more equal, you need to tax the rich. But to tax the rich, it helps for society to be more equal.