Equilibrium/Sustainability — ‘Love hormone’ keeps the peace among captive lions - The Hill

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Today is Thursday. Welcome to Equilibrium, a newsletter that tracks the growing global battle over the future of sustainability. Subscribe here and view the full edition here.

Lions that researchers dosed with nasal sprays of oxytocin, known as the “love hormone,” became far more friendly with other lions, a recent study has found.

The study has serious implications for the species’ long-term sustainability, with the animals increasingly confined to wildlife reserves or captivity as their habitats are destroyed.

Researchers noted that mass confinement is dangerous for lions, since they tend to ferociously protect their territory from those they deem intruders and “can mortally wound a foe with a single swipe.”

However, researchers found that the cats “totally chill out” after oxytocin is administered and are more tolerant of other lions in their space. Scientists hope these treatments can head off conflict among the animals — and clear a path for eventually reintroducing them into the wild.

“The hope is that this will [help] them to become more inclined to their new social environment so they’re more curious and less fearful, leading to more successful bonding,” lead author Jessica Burkhart said in a statement.

Today we’ll examine a new threat from Russia with major financial implications and look at President Biden’s proposed “billionaire’s tax” and its impact on the wealthy.

For Equilibrium, we are Saul Elbein and Sharon Udasin. Please send tips or feedback to selbein@thehill.com and sudasin@thehill.com.

Let’s get to it.

Russia blinks in ruble face-off

Russia has backed down — at least temporarily — from its threat to only take payment for gas shipments in its own currency.

In an announcement Thursday, Moscow offered a face-saving compromise: For now, countries like Germany can continue to pay in euros or dollars, which Russian banks will convert into rubles themselves.

The back-and-forth this past week over the demand for rubles has raised anxieties in the European Union. Demanding countries pay only in rubles would force customers like Germany to choose between funding Russia’s invasion of Ukraine or accepting the loss of a large chunk of their gas supplies.

Moscow started off bellicose: Russia said in its statement Thursday that “unfriendly countries” — those that have issued sanctions against Russia over its Feb. 24 invasion of Ukraine — would be required to pay for oil imports in Russian rubles rather than euros or dollars, The Associated Press reported.

But it left a loophole: Russian banks that handle the transactions will open parallel accounts for each purchaser — one in euros or dollars, the other in rubles, the AP reported.

Whenever an oil and gas purchase is made in foreign currency, the bank would automatically turn the foreign currency into rubles — helping keep demand for the currency strong without requiring foreign companies to buy them directly, in violation of many countries’ sanctions.

Why does Russia want payment in rubles? Currencies are a commodity like any other: The more demand there is for it, the higher prices — and valuation — goes.

That’s one reason why Western governments have banned companies from buying rubles in the first place, in one part of a multilateral package of sanctions that sent the value of the ruble plummeting to an all-time low of 151 to the dollar in early March, The Wall Street Journal reported.

The ruble has recovered somewhat, but under extremely artificial conditions — what the Journal called a “central-bank-induced coma,” which Moscow now wants to bolster by linking the currency directly to foreign purchases of the country’s products.

EUROPE BRACES FOR IMPACT

Russia’s central bank reversed the ruble’s collapse through open intervention: Forcing domestic companies to buy rubles and limiting their ability to sell them.

That brought the value back to 99 rubles to the dollar, just 17 percent below where it was when Russia invaded Ukraine, according to the Journal.

Now Russia wants to bid up demand further: Making countries like Germany buy rubles — directly or indirectly — would help do that.

European leaders argue that it would also breach the original oil and gas supply contracts that govern the ongoing sales, according to Reuters.

Germany plans for sudden shortage: Germany, which heavily depends on Russia for gas supplies to heat its population, on Wednesday set in motion contingency plans for what it would do in the event of a Russian embargo, the Journal reported.

In the event of a shortage — from Russian action or any other — Germany would ration gas, Reuters reported.

Industry would be cut off first, with the bulk of supply reserved for households, hospitals and critical infrastructure, the newswire reported.

Would an embargo cripple Germany? It’s arguable. Some economists say it would be harmful “but manageable,” while others say it would be equivalent to the hit the country’s economy took from the coronavirus pandemic, The Washington Post reported.

Such a move would hurt Russia, too: Oil and gas exports have played a key role in softening the blow from sanctions — one reason why Ukrainian President Volodymyr Zelensky has pushed European nations to take the hit and cut them off, as the Post reported.

Takeaways: While a sudden cutoff from either side remains possible, “a drawn-out negotiation process is more likely,” analysts from risk consultancy Eurasia Group said in a research note, according to CNBC.

‘Billionaire’s tax’ debate centers on income definition

A key revenue-raising element of President Biden’s proposed budget — the Billionaire Minimum Income Tax — is on life-support after Sen. Joe Manchin (D-W.Va.) announced earlier this week that he wouldn’t support it.

The debate over the future of the tax proposal centers around a key wealth-protecting measure enjoyed by the ultra-rich — and highlights a growing conviction among progressive Democrats to tax it.

Biden’s proposal includes other provisions aimed at helping small businesses move toward their climate goals and seeks to open up billions of dollars in loans for businesses that often can’t get access to capital.

What Biden said: “The tax code currently offers special treatment for the types of income that wealthy people enjoy,” Biden said in a statement, saying it “allows many of the very wealthiest people in the world to end up paying a lower tax rate on their full income than many middle-class households.”

That’s because it technically isn’t income: Instead, the very wealthy keep most of their net worth in stocks of companies they control — the rising value of which they can then borrow against to get cash for their living expenses, CNBC reported.

That’s how Elon Musk and other billionaires have at times managed to avoid paying any federal income taxes, as investigative watchdog ProPublica reported last year.

‘Buy, borrow and die’: The super-rich can “tell their accountant, ‘Make sure I don’t make any income, any salary.’ And then they say, ‘Make sure I can buy, borrow and die,’” Senate Finance Committee Chairman Ron Wyden (D-Ore.) said this week.

Making the top 0.01 percent pay 20 percent of any stock gains — which would otherwise not be taxed unless they were sold — would help make sure they pay similar tax rates to the middle class, Wyden added.

It would also raise another $361 billion over the next decade, according to White House estimates.

TAXATION’S NEW FRONTIER

Can someone pay taxes on money they haven’t made yet? Opponents of the proposal say asking them to do so is a violation of the 16th Amendment, which established taxes on income.

POINT: The government can’t tax what isn’t earned

At least, that’s Manchin’s perspective. “Earned income is what we’re based on,” he told our colleague Alexander Bolton at The Hill.

“There’s other ways to do it,” Manchin added. “Everybody has to pay their fair share. But unrealized gains is not the way to do it.”

COUNTERPOINT: That’s how middle-class people already pay taxes

Most people with salaries are accustomed to having the government withhold part of every paycheck — a prepayment on their taxes, which gets paid back as a refund if they’ve paid too much.

That’s essentially what’s being proposed here, University of Indiana economist David Gamage told Business Insider. “This actually isn’t a tax on unrealized gains — it’s a prepayment mechanism for capital gains,” Gamage said.

Prospects for passage? Without Manchin’s support, the billionaire’s tax is unlikely to go anywhere. But other elements of Biden’s budget may fare better, including some with strong sustainability implications, according to Inc.

For example, the budget proposes $10 million to help small businesses invest in green infrastructure, $31 million for “underserved entrepreneurs” and $30 million for regional innovation and growth accelerators to help new businesses get started.

And in one key line item, the Small Business Administration would receive nearly $10 billion for affordable lending programs — opening up access to capital that is often in short supply for small businesses.

Biden green-lights oil reserve release

The White House on Thursday announced plans for the largest-ever release of oil from the United States’ strategic reserves.

It said in a fact sheet that it would release an average of 1 million barrels per day for the next six months, resulting in a total release of about 180 million barrels.

In remarks on the plan on Thursday, President Biden called on the oil industry to produce more, while also criticizing industry profits.

“Enough of lavishing excessive profits on investors and payouts and buybacks when the American people are watching, the world is watching,” Biden said.

“This is not the time to sit on record profits. It’s time to step up for the good of your country, the good of the world, to invest in immediate production that we need to respond to Vladimir Putin, to provide some relief for your customers, not investors and executives,” he added.

The move comes as Russia’s invasion of Ukraine causes oil, and thus gasoline, prices to skyrocket. Many buyers are rejecting Russian barrels, creating less overall supply and increased demand from elsewhere.