Wry & Dry

Tsar Trump's tax victory. Red faces. Bitcoin bubble gets wider and worse.

Tsar Trump's tax victory 

Aside from boosting viewership on each of Twitter and the Washington equivalent of Seek.com, Tsar Trump's domestic successes have been, well zero in his first 10 months in the Oval Office.

That is about to change.  Believe it or not.  The US will soon have a company tax rate of 20% (it may end up at 22% after final horse-trading, down from about 35%) and significant cuts to personal income tax rates.  If the House and Senate finally agree on the fine print, this will be an amazing achievement.  Some folk will quibble about the trade-offs and the possible impact on future US government deficits, but even the most rabid Trump haters would have to dip their lid to the overall package.

Trump China tax lowered

Actually, they won't.  The number of Democrats in the House and Senate who voted for the tax cuts was...zero.  This is in contrast to the last tax reform package, when Ronald Reagan was President when the tax-reform proposals received bi-partisan support.   But those were, well, the good old days.

The Democrats don't like the tax reform package, essentially for three reasons.  Firstly, it's been proposed by Tsar Trump.  Secondly, part of the tax cuts is being financed by the abolition of part of so-called Obamacare, a universal US health plan, which will leave about 5% of Americans without healthcare coverage.  Thirdly, the tax reform package eliminates the tax deduction for state and local taxes.  The highest taxing states are Democrat states (e.g New York, California).  The federal-tax deductability of state and local taxes means that the average US taxpayer was funding those high-taxing states.

Cries that the tax cuts mostly benefit the rich are true.  But, hello, any tax cuts will mostly benefit the wealthy, as the wealthy pay the most tax and with a progressive tax system, a lop-sided outcome will always occur.  Of course, the US healthcare system is a disgrace for such a wealthy country.  But that is a separate matter.

W&D hastens to add that comparisons with Australia are not always relevant.  For example, there is no dividend imputation system in the US, although there is a close equivalent called 'pass-through' tax. 

The new US company tax rate of 20% or 22% makes Australia's 30% look somewhat unattractive.  But W&D has already written about this.  And reminds Readers of the below chart:

Company tax rates

Egg-on-face #1

Some Readers will remember Anna Bolic, the 22-year-old gymnast from France.  Or Wee Do-ping, the Chinese swimmer.  Each is etched into Australian sports' memory as an Olympic drug cheat [1].

Well, Readers can now add the entire Russian Winter Olympics team.  The IOC has given the team the DCM for the 2018 Winter Olympics, after it found that Russia engaged in extraordinary state-run systematic drug cheating at the 2014 Sochi Winter Olympics.

Russia skiing drugs

So why the egg-on-face for Tsar Vlad?  Well, the man who ran the whole doping scam is Vitaly Mutko, a close mate of Tsar Vlad.  They were deputy mayors of St Petersburg.  And Tsar Vlad appointed Mutko to run the FIFA World Cup (soccer) next year in Russia.

The IOC has banned Mutko for life.  FIFA's reaction?  The banning would "have no impact on the preparations for the 2018 World Cup."  Of course not.  How silly to expect FIFA to show some ethical behaviour.

Or maybe W&D reads to much into coincidences:  

3-Feb-16  Vyacheslav Sinev, founding chairman of RUSADA (Russian Anti-Doping Agency) died of a massive heart attack.

16-Feb-16 Nikita Kamaev, the former executive director of RUSADA, died of a massive heart attack. 

Kamaev had offered to reveal 'three decades of dirt on Russian athletes' cheating' after resigning amid the 2015 Russian track and field doping scandal.

Readers can join the dots.

But the Russians do aggrieved almost as good as the Chinese: "The IOC decision is completely unjustified and insulting," responded Alexei Kravtsov, president of the Russian Skating Union.

Egg-on-face #2

21st August: 

"We have a strict vetting process.  There is no cloud over any of our people, let's be straight here."

  -  William Shorten, current federal leader of the Labor Party, asserting that none of his Canberra colleagues was a dual citizen.

6th December:

"Labor Senator Katy Gallagher admitted today that she was a dual-citizen.  And the Labor member for the marginal seat of Batman in Victoria, David Feeney admitted that his citizen status "was in doubt." "

 -  Melbourne Age 

dual citizen Shorten

The egg-now-omelette-on-face is that Mr Feeney, William Shorten's best man, holds his inner-Melbourne seat by 1.03%.  On the voting in last month's state election for the overlapping seat of Northcote, if a by-election were held for his seat, Feeney would be down at CentreLink (it would become a Green seat).  He might be anyway, the Labor Party will not preselect him.

Over to the High Court for the next episode.

Out of Kremlin: feet first

Tsar Vlad has announced that in 2018 he will seek a new 6-year term as Tsar Of All Russians President of Russia.  Making the heroic assumption that he will easily win the election, it will mean 24 years in power, surpassing the lamented Leonid Brezhnev, but still falling short of Stalin's 31 years.

W&D's take on all of this?  It's a blend of ego and power.  He sees an unfinished job of wallpapering over Russia's vast economic cracks, increasing poverty, increasing corruption and shrinking population.  Two years into his next term he will see that raw data will show that he has failed.  So he will contrive an international event that will ensure he leaves office in high esteem.  With All Russians.

NBN's nightmare continues  

When former Labor government minister Senator Conroy sketched on the back of a drink coaster his dream of the National Broadband Network, the plan was a Return on Investment (RoI) of taxpayers' funds of 7% p.a.  Not too bad.  But now the smart folk around town suggest the NBN will be lucky to return 3% p.a.

NBN and lovers

Luckily for NBN that it is protected from retail competition.  Nothing like replacing one monopoly with another.

But a headache has arisen.  In South Australia, of all places.  Upstart telecom provider TPG, in cahoots with the Adelaide City Council, is planning a fibre-to-the-business broadband service in Adelaide's CBD that will deliver 100 times the speed of the NBN.  At a cheaper price than NBN's fastest service. And without an installation charge.

Ouch!  TPG's 'Ten Gigabit Adelaide' project is really going to eat NBN's lunch.  The NBN needs the highly profitable business customers to get its profit per customer up to $52, the point at which we-the-taxpayer receive a positive ROI.

Two chances.       

Amazon's whimperish start.  Or is it?

Upstart online retailer and distributor, Amazon, seems to have started its Australian business with a whimper.  Traditional Australian retailers were quick to alert their media communications' teams that Amazon's prices were higher than their own.  And that 'there were problems' with Amazon's offering.

The compliant media happily responded with a bit of xenophobic Amazon bashing.

W&D's advice: Don't be mistaken, don't be misled.  Amazon's UK launch seemed similarly slow.  But slowly the juggernaut got going.  Australian retailers: Be afraid.  Be very afraid. 

Deepak, W&D's Uber driver...

...was talking about Catalonia, that triangular-shaped piece in the top right-hand corner of Spain.  "What is going on? It's all gone quiet."  

Well, W&D responded, there has been a lot of movement below the waterline.  "Please explain," Deepak asked, sounding like Pauline Hanson when asked about her policy on almost anything other than Muslims. 

W&D noted three problems to Deepak.

Firstly, economically, almost 3,000 firms have shifted the registered address of their headquarters outside Catalonia since the banned referendum on October 1.  The fear is that the administrative exodus, i.e. companies effectively shifting domiciles, the ‘brass plate’ of the business, to avoid legal and tax complications, will lead to them eventually moving staff or operations.

Secondly, psychologically, according to a new poll published by Spain’s Center for Sociological Research, the number of Catalonian households that fear that their economic situation will worsen in the next six months surged from 14% in August to 22% in October. By contrast, in Spain as a whole, there was hardly any change, with the rate barely budging from 15.1% to 15.6%.

Thirdly, politically, many companies worry that secession would leave them outside the Eurozone and exposed to the unpredictable policies and possible tax grabs of a new republic burdened with heavy debts.  Such fears were compounded last week when Catalonia’s deposed president Carles Puigdemont suggested that the region may be better off outside not just Spain, but also the European Union.

Deepak sighed. "Anjali wants us to go there on our holidays.  I'll tell her it's too risky."  "Good luck with your projects," W&D replied, knowing that Deepak had invested their holiday money in Riot Blockchain Inc (see below).

Bitcoin bubble is wider than bitcoin

Readers will have read of W&D concerns about the crypto-currency: Bitcoin.  This worthless bundle of electrons is now valued at A$21,000!  

But that is not the main game.  Work with W&D on this. 

The main game is 'blockchain', the data storage facility used by Bitcoin and other crypto-currencies (and soon to be used by the ASX).  Not 'blockchain' as, well, a data storage facility, but as a brand-value enhancer.

Readers will remember the heady days of the Dotcom bubble of 1999-2002.  All a company had to do was add '.com' or 'e-' to its name and boom, up went the share price.

As W&D reported some weeks ago, it's now all about adding 'blockchain'. The latest example is BiOptix Diagnostics Inc, a bio-pharmaceutical company that has nothing to do with blockchain or bitcoin.  It changed its name to Riot Blockchain Inc, and up went its share price; by 117%.

See also On-line Plc, which became On-line Blockchain Plc.  Up 390%.

As each day dawns, a new scam arises.  This will end in tears.

But, in the meantime, W&D has registered Wry & Dry Blockchain Pty Ltd.  Just in case.

Millennial job interview 

For the interest of employers out there, click here to see a what your next job interview may look like...

W&D had a similar experience earlier this year (not as a potential employee...).  

 

 

Millennials

Speaking of millennials...

Readers would have seen an article in Wednesday's Wall Street Journal that reported that today’s dominant demographic group, millennials, are losing faith in capitalism and taking a more sympathetic view of socialism.

Whereas older Americans overwhelmingly prefer capitalism, a majority of millennials polled are roughly equal in their positive regard for the two competing socioeconomic systems, according to a Gallup poll. 

W&D's advice to readers is not to worry.  The poll was of Harvard University students.  It is a truth universally acknowledged that university students believe that the world owes them a living.  Which is the socialist dream. 

They will come around to a better way of thinking.  W&D remembers a saw his father often quoted: "When you are 20, if you are not a socialist you haven't got a heart.  When you are 40, if you are not a capitalist you haven't got a brain." 

Elsewhere

The RBA (yawn) kept its (yawn) target interest rate unchanged (yawn). 

Australian GDP rose 2.8% in the year to end September.  A good result, driven by business investment.  But consumer spending was anaemic.  Folk are blaming high energy prices and fear of higher interest rates for closed wallets and purses.   

And, to soothe your troubled mind...  

Miscellany 

Last words...

"With the help of fake reviews, mystique and nonsense, I was going to do it: turn my shed into London’s top-rated restaurant on TripAdvisor."  

-   Oobah Butler, a British journalist, who did just that.

Butler created 'The Shed at Dulwich', an imaginary restaurant that was always fully booked when people rang.  On 1st November, it became Trip Advisor's number one restaurant in London, without ever having had a customer.

First Samuel client events calendar

Date 

Description

Details

2018 Events  (Invitations not yet sent)

Tue-29-May-18

Eat Street - food & wine fest

Sofitel

Wed-18-Jul-18

NGV Winter Masterpieces Exhibition

Masterworks from Moma (New York)

NGV

Tue-14-Aug-18

Forum - guest speaker TBA

Leonda

Some lightly salted absurdities from all over...

At the extreme left-hand end of the Bell Curve

Andre Thomas Crew, 27, of Waldorf, Washington was in a minor car accident.  But got grumpy when the other driver, a woman, started taking photos of his car, number plate, etc.  So he drove his car at her, attempting to jam her between his car and hers.  

The only thing she could do was jump onto the bonnet of his car.  He decided to drive off, with her on the bonnet.  He tried to shake her off but she clung to the bonnet frame near the windscreen.  She jumped off just before he hit another vehicle.

(wtop.com)  

If you are going to hit and run, it's not wise to run with the victim on your bonnet.   

Guess what happens next 

Maurice Thibeault, who had lived with Denise Robertson, his girlfriend, and in her home for 2 1/2 years, bought a lottery ticket.  As he had done regularly with her.  But in October the ticket won $6m.    What did Maurice do next?

a.  Phoned Denise immediately to share the good news of their win;

b.  Waited for Denise to get home from work and welcomed her with a glass of French champagne;

c.  Phoned Denise and told her to meet him at the airport with her passport and bags packed; or

d.  Came home early from work, packed his bags and his passport and moved out before she got home.  

Close.  But no cigar.  The correct answer is d.  He didn't tell her that he/ they had the winning ticket for four days.   She then did what any modern woman would do: she lawyered up.  The Ontario gambling overseer has awarded him $3m, keeping the other $3m until the lawyers fight it out.   

(Toronto Sun)  

"But I really need the $600,000 annual allowance..."

The Belgian taxpayers pay the brother of King Philippe [2] a $600,000 annual allowance.  But in exchange for his allowance, the otherwise unemployed Prince Laurent is not allowed to have contact with foreign dignitaries, amongst other sensible restraints.  But earlier this year, Prince Laurent caused a diplomatic incident by appearing at a Chinese state celebration of the Red Army's 90th anniversary.  This was the last straw for the government and King Philippe.  And so his allowance was cut by $100,000.

But the well upholstered Prince has fired back.  His lawyer sent a seven-page letter to the prime minister and the Belgian government, complaining that the decision violated his human rights and will sentence the prince to 'social isolation'.  

(Metro)  

Sob.  The Court of Public Opinion made up its mind about Prince Laurent some time ago, he is widely known as ''écolo-gaffeur' (the eco-blunderer).

Have a wry and dry weekend

Anthony

[1]  Both were creations of Australian sports' satirist, The Twelfth Man (Billy Birmingham).

[2]  King Philippe is the seventh king of the Belgians.  He is a smart fellow: a graduate of Oxford and with an MA in political science from Stanford.  He is also a trained fighter pilot and commando.  Readers will know that Philippe married Mathilde d'Udekem d'Acoz, daughter of a Walloon Count of Belgian noble family and female line descendant of Polish noble families such as the Princes Sapieha and Counts Komorowski.  Their eldest child, Princess Elisabeth, will become Belgian's first queen regnant.