Axios AM

April 28, 2021
🐪 Happy Wednesday! Smart Brevity™ count: 1,087 words ... 4 minutes.
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1 big thing: Air havoc as passengers return
Illustration: Aïda Amer/Axios
Facing a post-pandemic surge of leisure travelers, airlines are adding layovers, changing routes and even switching planes at the last minute, Axios transportation correspondent Joann Muller writes.
Two realities are causing the craziness:
- Business travel remains practically non-existent. So airlines are reconfiguring routes to take advantage of what the industry calls VFR travel — visiting friends and relatives. These travelers pay less and are more likely to head to smaller destinations. So you suddenly see wide-body planes, usually used internationally, serving U.S. hubs.
- Cranking the system back up is a mess: Putting grounded aircraft back into service requires lots of maintenance. Laid-off flight crews need retraining and recertification before they can fly again.
Vaccinations are unleashing pent-up demand.
- And many Americans have banked a whole lot of frequent-flier miles, notes Brian Kelly, founder and CEO of The Points Guy website.
- Many have vouchers from cancelled 2020 trips that will expire soon.
The bottom line: Fares are up from last year's deep discounts, but are still significantly cheaper than they were before the pandemic.
- Vacationers are splurging — or using banked miles — to upgrade.
2. Biden's latest $1 trillion plan

⚡ New details from a White House preview of President Biden's 9 p.m. ET address to a joint session of Congress:
President Biden will present Congress tonight with his third $1 trillion+ spending package since taking office, asking for $1.8 trillion in new spending to expand the American education system, provide more help for childcare and create millions more jobs, Axios' Hans Nichols writes.
- Biden is also proposing a series of tax hikes on the rich, which his administration vows will not hit Americans who make less than $400,000 and households with less than $1 million in capital gains.
Between the lines: Several campaign promises are missing, including efforts to lower the cost of prescription drugs and expand Medicare eligibility — omissions that will aggravate his party's progressive base.
- Biden didn’t include his campaign plan to raise the estate-tax rate from 40% to 45%, and lower the exemption from $11 million to $3.5 million.
A centerpiece of this latest proposal is $310 billion to offer four more years of free education for all Americans, with two years of universal preschool and two years of free community college, regardless of income.
- Biden is also proposing extending child tax credits by up to $3,600 a year through 2025.
- Biden wants $225 billion to ensure that low and middle-income families don’t spend more than 7% of their income on childcare.
3. How Biden plans to pay

To pay for his plans, President Biden is relying on these five buckets, Axios' Hans Nichols reports:
- Raise the top marginal tax rate from 37% to 39.6% for Americans who make more than $400,000.
- Treat capital gains as regular income and tax it at the highest rate, plus a 3.8% Obamacare surcharge for a total of 43.4% on households with more than $1 million in investment income.
- Tax capital gains at death and eliminate the so-called "stepped-up" basis that allows estates to revalue assets after the original owner dies.
- Inject $80 billion into the IRS to audit high-income earners and collect an additional $700 billion through increased tax compliance over 10 years.
- Draw on any leftover revenue from increasing the corporate tax rate, as Biden previously proposed in the American Jobs Plan — including a global minimum tax, and raising the rate from 21% to 28%.
What we're asking: Will the proposed tax increases — especially on capital gains — be retroactive, capturing massive market gains of 2021?
4. Pictures of America

In Elizabeth City, N.C.., Patrice Revelle stands in front of police in riot gear last night as they enforce an 8 p.m. curfew during a peaceful protest of the police killing of Andrew Brown Jr.
- The FBI launched a civil rights probe yesterday into the death of Brown, who was killed by deputies serving drug-related search and arrest warrants. His family released an independent autopsy showing he was shot five times, including in the back of the head. Keep reading.
5. World steps up tech regulation
Illustration: Rae Cook/Axios
Tech giants face increasingly hostile foreign governments that are taxing their profits, trying to halt acquisitions, labeling them monopolies and passing laws to limit their power, Axios' Ashley Gold reports.
- Why it matters: Big Tech's international policy challenges mean companies are positioning themselves for regulatory fights overseas while the U.S. is still struggling to figure out what to do.
International antitrust enforcers have been trying to rein in American tech giants, taking actions against Amazon, Google and Apple. Various countries are passing new laws about content and moderation practices, and in some cases walling off their own internet access.
- Senate Majority Whip Dick Durbin (D-Ill.) said at a hearing on algorithms yesterday: "I've been trying to understand why the European Union is taking such an apparently bold and innovative approach to this subject, and we are so slow to respond."
Leaders of major U.S. tech companies have been warning about the consequences of this fragmented global approach to tech policy and are asking the U.S. to step up.
6. ☁️ Word clouds: How America sees Biden


7. Doubts on census
Cranes hover over downtown Austin, near the State Capitol. Photo: Eric Gay/AP
The 2020 census found only modest growth in the booming Sun Belt, shocking demographers and raising questions about the data, AP reports:
- Advocacy groups and officials are now wondering whether Latinos were reluctant to trust the Trump administration with information.
Between the lines: When compared to the most recent population estimates, Texas, Florida and Arizona all underperformed in the census.
- In all three states, Hispanics accounted for about half the population growth over the decade.
8. Corporate disruptors

TIME revealed its first list of the world's "100 Most Influential Companies," with five covers: Reese Witherspoon of Hello Sunshine, NBA Commissioner Adam Silver, GM CEO Mary Barra, Francis deSouza of Illumina and Sara Menker of Gro Intelligence.
- The newest company is Clubhouse, which released its app in April 2020.
9. Pandemic puppies cause vet crunch
A dog at the Denver Animal Shelter in 2016. Photo: Kathryn Scott/The Denver Post via Getty Images
The surge in dog adoptions is making it harder to schedule checkups with vets, writes Alayna Alvarez of Axios Denver.
- Urban Vet Care in Denver tried offering telemedicine, but found it was too demanding on doctors to juggle virtual and in-person visits. The clinic has paused the intake of all new clients.
- Dog groomers tell Axios their next availability is at least two months out. Pet supply store owners say business has never been better.
🐶 CBD sales for dogs with separation anxiety are also going up as people ease back into everyday life, said Jennifer Go, sales specialist at Quality Paws Natural Pet in Denver.
10. ⚽ 1 foot thing: Soccer dominance

The Instagram reach of U.S. athletes, even those as famous as LeBron James, pales in comparison to soccer's biggest stars, Axios Sports reporter Jeff Tracy writes.
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