How to pay a tax
Dig deep into your account
Then keep on digging
Dig deep into your account
Then keep on digging
Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts
Tuesday, March 31, 2020
Wednesday, December 30, 2015
Financial Sarcasm Roundup for 12/30/15
Social media users often tempt me to follow them down endless rabbit holes of replies. That is not how I prefer to spend my time. I would rather use my hours wisely in the pursuit of sarcasm.
The SEC's report on last August's volatility spike is out. It should have taken the SEC weeks, not months, to produce this report and it doesn't even draw any conclusions. A bunch of people at the SEC must be very concerned about how any hard evidence of malfunctioning markets would make them look bad or endanger their prospects with future employment on Wall Street. Fund managers are becoming very concerned about how liquidity interruptions in the bond market can trigger illiquidity in equity markets. They worry about being forced to sell stocks just to pay for bond fund redemptions. The SEC doesn't even get that the trading halts triggered in August can cause such illiquidity. We're sleepwalking into another market crisis and the SEC has no idea how to untangle its vine jungle of trading rules.
The wealthiest Americans have created their own private tax system. Affluenza has replaced civic obligation as the defining characteristic of this country's ruling elite. Rich people who claim they are willing to pay more in taxes aren't serious. Their claims are a stalking horse for increasing the burden on "tax donkeys" in the upper middle class of professionals who could displace them. I'll bet Bermuda is really nice this time of year. I wouldn't go there for vacation because these "income defense" people would just shoo me away. They don't even realize that they are the intended targets of their super-rich masters' desire to push the income tax burden downwards.
Bridgestone will allow Carl Icahn to walk away with Pep Boys. I think this deal is a play on the sharing economy for cars. Think about how car-sharing services will eventually hurt sales of new cars to Millennials who can't afford to drive anyway. Car-sharing services will still have cars on the road, driving constantly. Those cars will have to last longer and will need constant maintenance. Auto parts and services will always be in demand, even if corporations own most of the cars. Lots of aspiring Uber drivers can switch to jobs stocking parts at Pep Boys once Uber starts buying self-driving cars.
Let me get back to Bermuda as a tax haven. I don't see why Congress doesn't grant the same preferred status to Puerto Rico. Just think of all the professional income defenders who could then set up shop on that poverty-stricken island and help alleviate its insolvency. I guess the ultra-rich prefer to confine their tax donkeys to the same island where they take vacations, just to push them around in person. No one pushes me around. I'm a CEO, in case anyone forgets.
The SEC's report on last August's volatility spike is out. It should have taken the SEC weeks, not months, to produce this report and it doesn't even draw any conclusions. A bunch of people at the SEC must be very concerned about how any hard evidence of malfunctioning markets would make them look bad or endanger their prospects with future employment on Wall Street. Fund managers are becoming very concerned about how liquidity interruptions in the bond market can trigger illiquidity in equity markets. They worry about being forced to sell stocks just to pay for bond fund redemptions. The SEC doesn't even get that the trading halts triggered in August can cause such illiquidity. We're sleepwalking into another market crisis and the SEC has no idea how to untangle its vine jungle of trading rules.
The wealthiest Americans have created their own private tax system. Affluenza has replaced civic obligation as the defining characteristic of this country's ruling elite. Rich people who claim they are willing to pay more in taxes aren't serious. Their claims are a stalking horse for increasing the burden on "tax donkeys" in the upper middle class of professionals who could displace them. I'll bet Bermuda is really nice this time of year. I wouldn't go there for vacation because these "income defense" people would just shoo me away. They don't even realize that they are the intended targets of their super-rich masters' desire to push the income tax burden downwards.
Bridgestone will allow Carl Icahn to walk away with Pep Boys. I think this deal is a play on the sharing economy for cars. Think about how car-sharing services will eventually hurt sales of new cars to Millennials who can't afford to drive anyway. Car-sharing services will still have cars on the road, driving constantly. Those cars will have to last longer and will need constant maintenance. Auto parts and services will always be in demand, even if corporations own most of the cars. Lots of aspiring Uber drivers can switch to jobs stocking parts at Pep Boys once Uber starts buying self-driving cars.
Let me get back to Bermuda as a tax haven. I don't see why Congress doesn't grant the same preferred status to Puerto Rico. Just think of all the professional income defenders who could then set up shop on that poverty-stricken island and help alleviate its insolvency. I guess the ultra-rich prefer to confine their tax donkeys to the same island where they take vacations, just to push them around in person. No one pushes me around. I'm a CEO, in case anyone forgets.
Monday, August 17, 2015
Financial Sarcasm Roundup for 08/17/15
I get withdrawal symptoms if I go for too long without sarcasm. It's a healthy addiction, much better than any narcotic. I have no experience at all with narcotics, for the record. Those of you who do use narcotics should stay away from me until you kick the habit.
The IRS discovered its got hacked a lot worse in May than it had thought. I'll bet nobody gets fired. "Get Transcript" sounds like a great idea until a taxpayer who didn't choose a strong password gets doxed. The IRS's CIO should brush up on what FedRAMP says about securing the cloud. Rename the agency to "Ignore Required Security" for truth in advertising.
Amazon's workplace culture is the focus of major Internet buzz. It doesn't sound all that bad to me. I've worked at places where Darwinism, lying, and backstabbing were hidden beneath veneers of civility and chivalry. Getting it all out in the open with official policy is big progress. Giving a big bonus to a manager who sells their mother down the river would make it official. I have blogged before that corporate culture is totally a function of CEO personality and HR policies, because people respond to charismatic leadership and environmental incentives. Amazon's culture would be a case study in success if the company were a financial success. The trouble for Jeff Bezos is that Walmart earns more net income in a year than Amazon has in decades. Walmart solves supply chain problems much more effectively than Amazon, without the internal sniping.
American Apparel is having trouble sticking around. The teen market is only so big and Millennials are delaying the age at which they start families. Middle income families can't afford boutique clothes for their kids anyway after watching their incomes stagnate for decades. Kids these days need to learn to wear homemade clothes from potato sacks and old drapes, just like their great-grandparents did way the heck back in ye olden days of yore. That'll teach 'em, yes indeed.
I will sign off for now because I need to go look out my window at the fog coming in from the Pacific Ocean. Anyone who wants me to entertain them when I'm not blogging can log on to Spotify and listen to my music playlists. Just search for Anthony Alfidi, or "tonyalfidi," because Spotify doesn't have a listing for "Greatest Man Who Ever Lived."
Full disclosure: No positions in any companies mentioned.
The IRS discovered its got hacked a lot worse in May than it had thought. I'll bet nobody gets fired. "Get Transcript" sounds like a great idea until a taxpayer who didn't choose a strong password gets doxed. The IRS's CIO should brush up on what FedRAMP says about securing the cloud. Rename the agency to "Ignore Required Security" for truth in advertising.
Amazon's workplace culture is the focus of major Internet buzz. It doesn't sound all that bad to me. I've worked at places where Darwinism, lying, and backstabbing were hidden beneath veneers of civility and chivalry. Getting it all out in the open with official policy is big progress. Giving a big bonus to a manager who sells their mother down the river would make it official. I have blogged before that corporate culture is totally a function of CEO personality and HR policies, because people respond to charismatic leadership and environmental incentives. Amazon's culture would be a case study in success if the company were a financial success. The trouble for Jeff Bezos is that Walmart earns more net income in a year than Amazon has in decades. Walmart solves supply chain problems much more effectively than Amazon, without the internal sniping.
American Apparel is having trouble sticking around. The teen market is only so big and Millennials are delaying the age at which they start families. Middle income families can't afford boutique clothes for their kids anyway after watching their incomes stagnate for decades. Kids these days need to learn to wear homemade clothes from potato sacks and old drapes, just like their great-grandparents did way the heck back in ye olden days of yore. That'll teach 'em, yes indeed.
I will sign off for now because I need to go look out my window at the fog coming in from the Pacific Ocean. Anyone who wants me to entertain them when I'm not blogging can log on to Spotify and listen to my music playlists. Just search for Anthony Alfidi, or "tonyalfidi," because Spotify doesn't have a listing for "Greatest Man Who Ever Lived."
Full disclosure: No positions in any companies mentioned.
Wednesday, April 15, 2015
The Haiku of Finance for 04/15/15
Tax day came and went
Some get refunds, others pay
Keep records at home
Some get refunds, others pay
Keep records at home
Saturday, March 21, 2015
Sunday, February 01, 2015
The Limerick of Finance for 02/01/15
Foreign profits don't need some new tax
Collections have not become lax
Amnesty will work well
It's an easier sell
US firms pay up now to the max
Collections have not become lax
Amnesty will work well
It's an easier sell
US firms pay up now to the max
Foreign Profits Under Fire In US
Corporate cash looks like a big pile of potential energy to rational business leaders. It also looks like a big prize to politicians. The Obama Administration wants a special tax on the profits that American corporations hold in their foreign subsidiaries. The opening gambit of Washington's latest joust over tax reform is a play for more complex administrative burdens on corporations. The political appeal of reinvesting in America obscures the chaos awaiting in the details.
The smart way to bring foreign profits home is to apply any new tax to future earnings only. Grandfathering all prior earnings means corporations can keep whatever capital spending commitments they have made based on sequestering non-US earnings. The Administration does not seem inclined to move that way. The tax proposal reads as a grab for earnings held up to today.
US corporations already pay foreign taxes on their earnings from foreign operations, and these payments are addressed in the tax codes of both the US and foreign jurisdictions. Many US corporations also have transfer pricing agreements with foreign governments' revenue ministries. A new tax will force them to revise these agreements. The US would be in the unenviable position of taxing its most successful companies twice for the same operations if the Administration's opening proposal succeeds.
High-profile tax inversion mergers have become the bogeyman driving a political quest to do something superficially patriotic. Someone needs to send a memo to the White House's economic advisers that tax inversions are rarely the sole or even primary criterion for international mergers and acquisitions. Corporate development officers execute checklists numbering hundreds of deal criteria. Tax considerations may be one or two questions on a pre-merger checklist.
Corporations sequester cash in their non-US affiliates to fund enterprise growth, hedge currency volatility, and pay local employees. Unleashing a bull into a china shop leads to lots of broken crockery. The Administration's intended tax bull will upset many carefully emplaced corporate plans.
The smart way to bring foreign profits home is to apply any new tax to future earnings only. Grandfathering all prior earnings means corporations can keep whatever capital spending commitments they have made based on sequestering non-US earnings. The Administration does not seem inclined to move that way. The tax proposal reads as a grab for earnings held up to today.
US corporations already pay foreign taxes on their earnings from foreign operations, and these payments are addressed in the tax codes of both the US and foreign jurisdictions. Many US corporations also have transfer pricing agreements with foreign governments' revenue ministries. A new tax will force them to revise these agreements. The US would be in the unenviable position of taxing its most successful companies twice for the same operations if the Administration's opening proposal succeeds.
High-profile tax inversion mergers have become the bogeyman driving a political quest to do something superficially patriotic. Someone needs to send a memo to the White House's economic advisers that tax inversions are rarely the sole or even primary criterion for international mergers and acquisitions. Corporate development officers execute checklists numbering hundreds of deal criteria. Tax considerations may be one or two questions on a pre-merger checklist.
Corporations sequester cash in their non-US affiliates to fund enterprise growth, hedge currency volatility, and pay local employees. Unleashing a bull into a china shop leads to lots of broken crockery. The Administration's intended tax bull will upset many carefully emplaced corporate plans.
Saturday, January 17, 2015
Tuesday, September 23, 2014
Saturday, September 06, 2014
Friday, August 15, 2014
Saturday, June 07, 2014
Thursday, June 05, 2014
The Haiku of Finance for 06/05/14
Tax defeasance plan
Bonds offset new assessments
Wealth transfer done right
Bonds offset new assessments
Wealth transfer done right
SF Prop A and California Prop 41 Tax Defeasance Through Muni Bonds
San Francisco Voters passed Proposition A this week, calling for a $400B muni bond issue to fund seismic retrofits of first responders' facilities in the City. California voters passed Proposition 41, diverting bond proceeds raised for CalVet home and farm loans to low-income housing for homeless veterans. San Francisco voters will eventually pay higher property taxes to pay off the principal and interest of these bonds. Taxpayers are also investors. They can effectively get their money back through a form of defeasance.
A San Francisco property owner can theoretically buy a sufficient amount of city and state muni bonds whose interest payments will offset their property tax increases. They would have to buy whatever new general obligation issues are specifically intended to fund these most recent ballot measures. If enough San Franciscans do it, their increased property taxes transform into tax-free income.
Here's an illustration of how this would theoretically work. The San Francisco June 2014 Voter Information Pamphlet and Sample Ballot described the fiscal impact of Prop. A. The City Controller estimated that Prop. A's fiscal impact is an average tax rate of $9.61 per $100,000 of assessed value through 2040. Offsetting this with a purchase of San Francisco muni bonds means buying enough of them to pay at least that much in annual interest. The California Voter Information Guide for Prop. 41 has a similar analysis but does not reveal the property tax rate impact for assessed property. Darn, that's no help. California's bonds carry the lowest rating in the nation because this state can't get its act together.
I logged into the brokerage where I maintain my portfolio and searched their bond inventory. The California GO bond inventory revealed coupons of 4.25%-5.25% for maturities out to 2029, which is the target maturity implied by Prop. 41's analysis. The San Francisco GO coupons for all maturities past 2014 ranged from 4.00%-5.00%. Buying one SF GO 4% bond of $5000 face value will pay $200 in interest per year, more than enough to offset a Prop. A tax assessment on $100,000 worth of property. I'll assume the same holds true for the state's Prop. 41 assessment; buying one $5000 California GO bond should be sufficient. The bottom line is that San Francisco real property owners can elect to set aside the liquid equivalent of 10% of their real property's value (i.e., two $5K muni bonds for each $100K) as a defeasance for the taxes to fund these bond issues. That's what I would do if I owned real property in this town, but I don't tell anyone else what to do with their own money. I would of course receive much more from interest than I would pay in taxes, so muni bond defeasance of property taxes sure looks like a transfer of wealth from City taxpayers to bond holders.
I won't debate the political merits of either measure except to say that I voted against them. I generally oppose issuing new government debt unless it is earmarked for spending on capital goods in the "public commons" that enhance economic activity. I suppose I can live with Prop. A because it supports The City's long term capital improvement plan, but City Hall needs to cut other things first IMHO before planning bond issues. I also won't recap my hyperinflation warning, which would make any bond purchase worthless. Hyperinflation would rapidly eliminate property tax burdens anyway so defeasance would be a waste of effort.
Full disclosure: None of this analysis constitutes financial advice; go see a registered financial advisor for that service. I do not own any muni bonds at this time. I do not own real property with assessable value in San Francisco.
A San Francisco property owner can theoretically buy a sufficient amount of city and state muni bonds whose interest payments will offset their property tax increases. They would have to buy whatever new general obligation issues are specifically intended to fund these most recent ballot measures. If enough San Franciscans do it, their increased property taxes transform into tax-free income.
Here's an illustration of how this would theoretically work. The San Francisco June 2014 Voter Information Pamphlet and Sample Ballot described the fiscal impact of Prop. A. The City Controller estimated that Prop. A's fiscal impact is an average tax rate of $9.61 per $100,000 of assessed value through 2040. Offsetting this with a purchase of San Francisco muni bonds means buying enough of them to pay at least that much in annual interest. The California Voter Information Guide for Prop. 41 has a similar analysis but does not reveal the property tax rate impact for assessed property. Darn, that's no help. California's bonds carry the lowest rating in the nation because this state can't get its act together.
I logged into the brokerage where I maintain my portfolio and searched their bond inventory. The California GO bond inventory revealed coupons of 4.25%-5.25% for maturities out to 2029, which is the target maturity implied by Prop. 41's analysis. The San Francisco GO coupons for all maturities past 2014 ranged from 4.00%-5.00%. Buying one SF GO 4% bond of $5000 face value will pay $200 in interest per year, more than enough to offset a Prop. A tax assessment on $100,000 worth of property. I'll assume the same holds true for the state's Prop. 41 assessment; buying one $5000 California GO bond should be sufficient. The bottom line is that San Francisco real property owners can elect to set aside the liquid equivalent of 10% of their real property's value (i.e., two $5K muni bonds for each $100K) as a defeasance for the taxes to fund these bond issues. That's what I would do if I owned real property in this town, but I don't tell anyone else what to do with their own money. I would of course receive much more from interest than I would pay in taxes, so muni bond defeasance of property taxes sure looks like a transfer of wealth from City taxpayers to bond holders.
I won't debate the political merits of either measure except to say that I voted against them. I generally oppose issuing new government debt unless it is earmarked for spending on capital goods in the "public commons" that enhance economic activity. I suppose I can live with Prop. A because it supports The City's long term capital improvement plan, but City Hall needs to cut other things first IMHO before planning bond issues. I also won't recap my hyperinflation warning, which would make any bond purchase worthless. Hyperinflation would rapidly eliminate property tax burdens anyway so defeasance would be a waste of effort.
Full disclosure: None of this analysis constitutes financial advice; go see a registered financial advisor for that service. I do not own any muni bonds at this time. I do not own real property with assessable value in San Francisco.
Wednesday, May 07, 2014
Monday, May 05, 2014
Financial Sarcasm Roundup for 05/05/14
I have been quite busy these past few weeks and I have not had much time to generate a whole lot of analysis. You people will have to busy yourselves with my haiku until things settle down. Here's some sarcasm to keep you motivated or make you upset. I truly don't care how any of you feel after reading my genius language.
The National Stock Exchange is preparing to cease operations. Who are these people anyway? I've never heard of them and I'm really in step with the markets. They should have done what IEX Group did to beat the dark pools at their own game but I guess routing slower trades never occurred to them. Maybe a couple of squirrels could use their system to trade acorns after they turn the lights out.
Norway is transferring its sovereign wealth fund from JPMorgan to Citigroup. Oh for crying out loud, that is a dumb move. Switching from the Rockefeller's family bank to a bank that needed massive government bailouts shows how little the Norwegians understand about the American aristocracy. The Rockefeller institutions have proven remarkably resilient. JPM is one domino that will stick straight up as others fall thanks to its elite connections. Just ask Warren Buffett, who has owned JPM in his personal portfolio.
American banks are cutting their exposure to Russian transactions. I think a lot of bicoastal preppies will run short of imported caviar if Russian exporters can't get credit lines at US banks. Further sanctions could very well force these banks to sell off what remains of their Russian loan portfolios, in a discounted gift to any European banks able to line up bids. Our banks have very limited exposure to Russia anyway.
Here's something that America's home-grown conspiracy nuts won't like. Deutsche Bank is telling its US clients to close their accounts because FATCA's reporting requirements are too onerous. Our Treasury notes these concerns by saying it won't stringently enforce FATCA through 2015. That noise is small consolation for non-US banks that don't want to comply with US assertions of sovereignty outside American borders. The stupid Americans who opened accounts overseas thinking they can escape federal tax scrutiny are about to get their fingers broken hard as foreign doors slam shut. American citizens will comply with federal tax reporting and they will learn to like it.
There hasn't been a whole lot in the news lately to make me angry. I have been quite happy lately noting that there are a lot of attractive women walking around my local area wearing shorts, tight skirts, and yoga pants. I just might invite them over to my place where they can unburden themselves of said clothing, if I can find the time in my schedule.
The National Stock Exchange is preparing to cease operations. Who are these people anyway? I've never heard of them and I'm really in step with the markets. They should have done what IEX Group did to beat the dark pools at their own game but I guess routing slower trades never occurred to them. Maybe a couple of squirrels could use their system to trade acorns after they turn the lights out.
Norway is transferring its sovereign wealth fund from JPMorgan to Citigroup. Oh for crying out loud, that is a dumb move. Switching from the Rockefeller's family bank to a bank that needed massive government bailouts shows how little the Norwegians understand about the American aristocracy. The Rockefeller institutions have proven remarkably resilient. JPM is one domino that will stick straight up as others fall thanks to its elite connections. Just ask Warren Buffett, who has owned JPM in his personal portfolio.
American banks are cutting their exposure to Russian transactions. I think a lot of bicoastal preppies will run short of imported caviar if Russian exporters can't get credit lines at US banks. Further sanctions could very well force these banks to sell off what remains of their Russian loan portfolios, in a discounted gift to any European banks able to line up bids. Our banks have very limited exposure to Russia anyway.
Here's something that America's home-grown conspiracy nuts won't like. Deutsche Bank is telling its US clients to close their accounts because FATCA's reporting requirements are too onerous. Our Treasury notes these concerns by saying it won't stringently enforce FATCA through 2015. That noise is small consolation for non-US banks that don't want to comply with US assertions of sovereignty outside American borders. The stupid Americans who opened accounts overseas thinking they can escape federal tax scrutiny are about to get their fingers broken hard as foreign doors slam shut. American citizens will comply with federal tax reporting and they will learn to like it.
There hasn't been a whole lot in the news lately to make me angry. I have been quite happy lately noting that there are a lot of attractive women walking around my local area wearing shorts, tight skirts, and yoga pants. I just might invite them over to my place where they can unburden themselves of said clothing, if I can find the time in my schedule.
Thursday, April 24, 2014
Tuesday, April 22, 2014
IRS Pays Premium For Tax Inefficiency
Oh, this is just rich (pun intended. The IRS paid performance bonuses to underperforming employees. I am quite familiar with the entitlement mentality of many federal government employees, especially the ones in unions. These people wouldn't last a day in the private sector yet the government coddles them all the way to their retirement. The quoted sums from that article work out to less than $1000 per IRS employee, which is a pittance when you consider that performance-based bonuses make up the lion's share of compensation for most financial sector employees. Any self-respecting financial adviser or floor trader who was offered such a tiny bonus would probably quit in disgust on the spot.
Clueless tax experts should read my past articles on taxation. I come out swinging in favor of a flat tax on all income, earned or unearned, with no deductions or other exceptions at all. This is fair and it will stop all sorts of economic leeches from gaming the system. The federal government typically collects somewhere between 17% and 20% of the nation's GDP as tax revenue, and making it harder over time with a more complex tax code has not raised that figure. Simplifying things with a flat tax will make it easier for businesses to plan for growth.
Machine learning is on the verge of automating every routine business function. Uncle Sam is slow to catch on to everything so I give the federal government a couple of decades to figure out how to automate its revenue collection. Doing it automatically with a much simpler tax code means firing all of the IRS problem children and returning their bonuses to the Treasury.
Clueless tax experts should read my past articles on taxation. I come out swinging in favor of a flat tax on all income, earned or unearned, with no deductions or other exceptions at all. This is fair and it will stop all sorts of economic leeches from gaming the system. The federal government typically collects somewhere between 17% and 20% of the nation's GDP as tax revenue, and making it harder over time with a more complex tax code has not raised that figure. Simplifying things with a flat tax will make it easier for businesses to plan for growth.
Machine learning is on the verge of automating every routine business function. Uncle Sam is slow to catch on to everything so I give the federal government a couple of decades to figure out how to automate its revenue collection. Doing it automatically with a much simpler tax code means firing all of the IRS problem children and returning their bonuses to the Treasury.
Tuesday, April 15, 2014
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