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Biden’s budget proposes tax hike on married filers making more than $450,000

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President Joe Biden introduces his budget request for fiscal year 2023 on March 28, 2022 in Washington.

Anna Moneymaker | Getty Images

President Joe Biden released his 2023 federal budget request on Monday, calling to hike the top marginal income tax rate to 39.6% from 37%, a proposal floated by the administration last year.

The higher rates apply to married couples filing together with taxable income over $450,000, heads of household above $425,000, single filers making more than $400,000 and $225,000 for married taxpayers filing separately, according to the Treasury Department.

If enacted, the change may hit higher earners beginning after Dec. 31, 2022, and income thresholds may adjust for inflation after 2023.

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However, increases to income tax rates may be difficult to pass, with previous pushbacks from Sen. Kyrsten Sinema, D-Ariz.

Moreover, Democrats have a short window to reach an agreement before midterm election campaigns begin ramping up.

“There weren’t enough lawmakers in favor of raising the rate to 39.6% last year for it to make the cut in the House-passed reconciliation bill,” said Erica York, senior economist and research manager at the Tax Foundation. “And I don’t see anything that has changed to make it easier in an election year.”

It’s been years since the presidential budget actually went anywhere, and this seems like another one that’s kind of dead on arrival.

Howard Gleckman

Senior fellow at the Urban-Brookings Tax Policy Center

Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center agrees the individual tax proposals, including an increase on the highest marginal income tax bracket, may not be politically viable.

“It’s been years since the presidential budget actually went anywhere,” he said. “And this seems like another one that’s kind of dead on arrival.”

With the Congressional Budget Office scoring already complete for many of Biden’s past proposals, there’s the potential for Democrats to move quickly on an agreement.

However, a lot depends on Sen. Joe Manchin, D-W.Va., who blocked the House version of Biden’s Build Back Better, and his willingness to restart negotiations, Gleckman said.

Former President Donald Trump’s signature 2017 tax overhaul temporarily reduced the top marginal rate to 37% through Dec. 31, 2025. However, it will automatically revert to 39.6% when the provision sunsets in January 2026 unless extended by Congress.

Biden’s 2023 federal budget also asks for a “billionaire minimum tax,” a 20% income tax rate for the top 0.01% of earners and families with wealth exceeding $100 million, among other revenue raisers, which policy experts say may be a tough sell.

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Disney is raising prices, but this time, don’t blame inflation

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Another major American company is raising prices again, but this time, don’t blame inflation.

Disney is increasing the price on its streaming products and signaled that a price hike could be in the works at its theme parks as well. On Wednesday, the company said the price of Disney+ without ads is jumping $3 per month to $10.99 starting Dec. 8. Hulu with ads will increase by $1 per month to $7.99, and Hulu without ads will jump $2 per month to $14.99.

Then on Thursday, Disney Chief Executive Officer Bob Chapek indicated to CNBC’s Julia Boorstin that a price increase will likely happen at theme parks as long as people keep coming in droves.

“We read demand. We have no plans right now in terms of what we’re going to do, but we operate with a surgical knife here,” Chapek said. “It’s all up to the consumer. If consumer demand keeps up, we’ll act accordingly. If we see a softening, which we don’t think we’re going to see, then we can act accordingly as well.”

Instead of blaming the rising cost of materials, labor and gas, Disney is rationalizing the increases based on the consistency of the popularity of its products. Disney said Wednesday that Disney+ added 15 million new subscribers last quarter, blowing out expectations. It also said it expects further growth for core Disney+ (excluding India’s Disney+ Hotstar) next quarter beyond the 6 million it added in its fiscal third quarter.

Raising prices on the back of strong demand isn’t new for Disney. The price of theme park tickets has climbed for decades. During its most recent quarter, the company posted a 70% revenue increase in its parks, experiences and products division, rising to close to $7.4 billion. Per capita spending at domestic parks rose 10% and is up more than 40% compared with fiscal 2019.

Handout | Getty Images Entertainment | Getty Images

Disney strategically caps attendance at its parks, an effort that was borne out of the attempts to avoid crowding during the Covid pandemic. The move is a way to improve the customer experience. Additionally, the company has added Genie+ and Lightning Lane products, which curate guest experience and allow parkgoers to bypass lines for major attractions.

Beyond the parks, Disney annually asks cable TV providers to pay aggressive price hikes for ESPN because it knows there’s strong demand for its stable of live sports rights.

Disney+ first launched in November 2019 at $6.99 per month. About three years later, the price of the ad-free product will have risen 57%. The service now has more than 152 million customers.

Chapek has experienced his share of bumps in the road since taking over for Bob Iger as Disney CEO. But one thing hasn’t changed: consumers still seem to enjoy what Disney has to offer.

Correction: During its most recent quarter, the company posted a 70% revenue increase in its parks, experiences and products division, rising to close to $7.4 billion. An earlier version misstated the percentage and mischaracterized the dollar figure.

WATCH: CNBC’s full interview with Disney CEO Bob Chapek

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Disney streaming subscriber growth blows past estimates, as company beats on top and bottom line

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A performer dressed as Mickey Mouse entertains guests during the reopening of the Disneyland theme park in Anaheim, California, U.S., on Friday, April 30, 2021.

Bloomberg | Bloomberg | Getty Images

If Disney+’s subscriber growth is any indication, the rumors that the global streaming market is nearing saturation have been proven untrue.

On Wednesday, the Walt Disney Company reported that total Disney+ subscriptions rose to 152.1 million during the fiscal third quarter, higher than the 147 million analysts had forecast, according to StreetAccount.

At the end of the fiscal third quarter, Hulu had 46.2 million subscribers and ESPN+ had 22.8 million. Combined, Hulu, ESPN+ and Disney+ have over 221 million streaming subscribers. Netflix, long the leader in the streaming space, had 220 million subscribers, according to the most recent tally.

Disney shares rose more than 6% after the closing bell.

The streaming space has been in a state of upheaval in recent weeks, as Netflix disclosed another drop in subscribers and Warner Bros. Discovery announced a shift in content strategy. While Netflix expects subscriber growth to rebound, uncertainty has left analysts and investors wondering what the future holds for the wider industry.

Also Wednesday, the company unveiled a new pricing structure that incorporates an advertising-supported Disney+ as part of an effort to make its streaming business profitable.

During the fiscal third quarter Disney+, Hulu and ESPN+ combined to lose $1.1 billion, reflecting the higher cost of content on the services. Disney’s average revenue per user for Disney+ also decreased by 5% in the quarter in the U.S. and Canada due to more customers taking cheaper multiproduct offerings.

Starting Dec. 8 in the U.S., Disney+ with commercials will be $7.99 per month — currently the price of Disney+ without ads. The price of ad-free Disney+ will rise 38% to $10.99 — a $3 per month increase.

In addition, Disney lowered its 2024 forecast for Disney+ to 215 million to 245 million subscribers, down 15 million on both the low end and high end of the company’s previous guidance.

Disney had previously set its Disney+ guidance in December 2020 at 230 million to 260 million by the end of fiscal 2024. The company reaffirmed its expectation that Disney+ will become profitable by the end of its fiscal 2024 year.

Overall, Disney posted better-than-expected earnings on both the top and bottom line, bolstered by increased spending at its domestic theme parks.

Here are the results:

  • Earnings per share: $1.09 per share vs. 96 cents expected, according to a Refinitiv survey of analysts
  • Revenue: $21.5 billions vs. $20.96 billion expected, according to Refinitiv
  • Disney+ total subscriptions: 152.1 million vs 147.76 million expected, according to StreetAccount

Big quarter for parks

Disney’s parks, experiences and products division saw revenue increase 72% to $7.4 billion during the quarter, up from $4.3 billion during the same period last year. The company said it saw increases in attendance, occupied room nights and cruise ship sailings.

It also touted that its new Genie+ and Lightning Lane products helped boost average per capita ticket revenue during the quarter. These new digital features were introduced to curate guest experience and allow parkgoers to bypass lines for major attractions.

The company said it has been able to bring back in-park experiences such as character meet-and-greets, theatrical performances and nighttime events at Disneyland, which has allowed it to increase capacity at its parks, CEO Bob Chapek said during the company’s earnings call Wednesday. Disney has placed caps on attendance since it reopened after the initial round of pandemic closures in early 2020 and instituted a new online reservation system to control crowds.

“As it relates to demand, we have not yet seen demand abate at all and we still have many days when people cannot get reservations,” Christine McCarthy, Disney’s chief financial officer, said during the company’s earnings call. “So, we’re still seeing demand in excess of the reservations that we are making available for our guests.”

Per capita spending at domestic parks increased 10% during the most recent quarter, compared to the same quarter last year and is more than 40% higher than fiscal 2019, the company said. Occupancy at domestic hotels in the third quarter was 90%.

Chapek pointed to EPCOT’s new Guardians of the Galaxy Cosmic Rewind, the launch of the Disney Wish and the opening of Avenges Campus in Paris Disneyland as enhanced offerings for guests that have driven traffic and revenue to this division.

McCarthy noted that international visitors to domestic parks have continued to be slow to return. Traditionally, those parkgoers account for around 17% to 20% of total guests.

“We expect international visitation when its fully back to actually be additive to margins, because those guests tend to stay longer at the parks and they spend more money when they’re there, as well,” she said.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. Comcast owns a stake in Hulu.

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Serena Williams announces her retirement from tennis

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Tennis legend Serena Williams announced her retirement in a Vogue article published Tuesday.

“I have never liked the word ‘retirement,'” Williams wrote. “Maybe the best word to describe what I’m up to is ‘evolution.’ I’m here to tell you that I’m evolving away from tennis, toward other things that are important to me.”

Williams, who turns 41 next month, has 73 career singles titles, 23 career doubles titles and over $94 million in career winnings.

Williams is widely hailed as one of the greatest athletes of all time. In her Vogue piece, she noted that some of her detractors point out that she hasn’t won the most Grand Slam titles in women’s tennis history, however. 

“There are people who say I’m not the GOAT because I didn’t pass Margaret Court’s record of 24 grand slam titles, which she achieved before the ‘open era’ that began in 1968,” Williams wrote. “I’d be lying if I said I didn’t want that record.”

She said she will retire after the U.S. Open, which will run from late August into September. A victory there would tie her with Court’s Grand Slam record.

“I don’t know if I will be ready to win New York. But I’m going to try,” Williams wrote about the tournament, which is played in Queens.

She has counted sponsorships from companies including Nike, Audemars Piguet, Away, Beats, Bumble, Gatorade, Gucci, Lincoln, Michelob, Nintendo, Wilson Sporting Goods, and Procter and Gamble.

“I never wanted to have to choose between tennis and a family. I don’t think it’s fair,” Williams wrote. “If I were a guy, I wouldn’t be writing this because I’d be out there playing and winning while my wife was doing the physical labor of expanding our family.”

Williams focused on her family in the announcement, writing that her nearly five-year-old daughter wants to be an older sister. Williams is married to Reddit founder Alexis Ohanian.

“I have to focus on being a mom, my spiritual goals and finally discovering a different, but just exciting Serena. I’m gonna relish these next few weeks,” Williams wrote in an Instagram post Tuesday.

Professionally, she looks to expand Serena Ventures, a small investment firm of six people that was one of the first investors in MasterClass. Her firm raised $111 million in outside financing this year.

Williams wrote that only 2% of venture capital goes to women and that “in order for us to change that, more people who look like me need to be in that position, giving money back to themselves.”

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