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| June 13 · Issue #220 · View online |
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š Welcome back to P.S. You Should Knowā¦ probably the best newsletter published on Sundays between 6-7am CST, and definitely the best one published by me. Now in its fifth year!
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Some musings from this weekā¦
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- Itās hard to tax the rich. Carried interest is a remarkable tax loophole for investors across venture capital, private equity and hedge funds. Essentially, money earned by investing other peoplesā money over a long time counts as investment gains not ordinary income, creating a huge tax advantage. President Biden is planning to raise the capital gains tax, removing that advantage. But not so fast! Sequoia, at least, has a contingency plan. The tax code is complex and tax accountants, I assure you, can be very creative. For those with a lot of money at stake, thereās plenty of incentive to discover new tax-minimizing strategies.
- But how fair is blaming the rich? ProPublica somehow obtained tax returns of popular and wealthy Americans Jeff Bezos, Elon Musk and Warren Buffet. They made up a ātrue taxā rate that calculate effective tax rate based on income plus estimated asset appreciation. Predictably, their ātrue taxā rates are shockingly low! They range from 0.10% to 3.27%. As shocking as this might be, I donāt view it as a useful analysis. The common factor here is asset appreciation, and these particular fellows happen to own appreciating assets. Oh, and they happen to have largely created those assets. So, what we learn by studying their ātrue taxā rates is that they didnāt choose to sell those assets during the year.
- To sell or not to sell. The well-known trio above are not the only ones who face this choice. Many of us have appreciated assets that we could sell at any given time. When we sell, we know weāll face the consequences ā tax and otherwise. If you sell your Amazon stock today, youāll owe income taxes on the gains and also miss out on any future appreciation. But if you hold that stock in the right brokerage account, you can borrow against its value instead of selling it. While youāll pay (very little) interest on the loan, you wonāt pay taxes because the proceeds arenāt income. This option is not exclusively for the wealthiest Americans ā as little as $10k in an account can qualify. Now, of course, you must eventually repay that money and the interest rate might change at any time. But, as ProPublica appropriately states: āIf you can avoid income, you can avoid taxes.ā
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Chinaās WeChat bans nose-picking, spanking. āBesides nose-picking and spanking, other "vulgarā activities that are banned include putting underwear over oneās head and focusing the camera lens on sensitive parts of the body, such as the chest or buttocks,,.ā | learn more
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The emperorās new sculpture. āLast month, the 67-year-old artist Salvatore Garau sold an āimmaterial sculptureāāwhich is to say that it doesnāt exist.ā The price? $18,300. | learn more
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Lobsters can get high. āThe impetus for this groundbreaking study: a Maine restaurant thatās famous for hot boxing lobsters. Back in 2018, restaurateur Charlotte Gill of Charlotteās Legendary Lobster Pound sent the internet into a tizzy when she told a local newspaper that she was experimenting with marijuana in hopes creating a more humane way to kill lobsters.ā | learn more
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CPD investigating video of 3 women dancing on top of police cruiser. Everyone seems to be having fun. | learn more
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People are waking up to the importance of sleep. āWith sleep playing such a big role in a personās metabolic, immune, mental and overall health, itās time for people to start taking their sleep seriously. How do you do that? According to Chicago entrepreneur Jeff Kahn, two actionable ways to do that are by adjusting your schedule to your circadian rhythm and reducing your sleep debt.ā | learn more
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Working from home productivity data from 150,000 employees. āWorkers accomplished the same amount but spent 2 hours more per day (7h vs 5h) at the office. So despite a reduction in commute hours, this companyās productivity declined (defining productivity as output per hour.)ā | learn more
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Learn your biological age from the comfort of your own home. This article in Wired (a couple years old) highlights companies that commercialize epigenetic clocks that predict biological age. I first learned of this technology in the book Lifespan, but I havenāt paid to take my own test yet. Have you? | learn more
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The first new Alzheimerās drug since 2003 approved by FDA. The approval came despite the advisory committeeās near-unanimous vote against it. āThe apĀproval, howĀevĀer, will do litĀtle to quell critĀiĀcisms from the swath of Alzheimerās reĀsearchers, bioĀstaĀtisĀtiĀcians, and clinĀiĀcians who have arĀgued that BioĀgen cherĀry-picked daĀta and failed to show conĀvincĀing evĀiĀdence that the drug can slow paĀtientsā cogĀniĀtive deĀcline.ā | learn more
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Using DNA to predict intelligence. A short and intriguing research paper. āThousands of DNA variants have been identified that ā aggregated into genome-wide polygenic scores (GPS) ā account for more than 10% of the variance in phenotypic intelligence. The intelligence GPS is now one of the most powerful predictors in the behavioral sciences.ā | learn more
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3D printing of sensors directly on expanding organs. āThe new technique allows for even more sophisticated tracking to 3D print sensors on organs like the lungs or heart that change shape or distort due to expanding and contracting.ā | learn more
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Scientists develop ācheap and easyā method to extract lithium from seawater. We need a lot of lithium because we need a lot of batteries. More battery manufacturing facilities are being funded than lithium extraction facilities. | learn more
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Bill Maher and Mike Rowe share a view on higher ed. Maher recently included a segment on his show that overlaps with many of Roweās ideas. āI want people to radically rethink higher education. Toward that end, Iāve always maintained that making a four-year degree āless expensiveā is a great symptom, but a lousy goal. The better goal is to make a four-year degree less necessary than it currently is. Thatās not an āanti-educationā position. Itās a cry for rationality, proportionality, and common sense.ā | learn more
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The history of homework. āHomework is long-standing education staple, one that many students hate with a fiery passion. We canāt really blame them, especially if itās a primary source of stress that can result in headaches, exhaustion, and lack of sleep. ā¦ It makes one wonder, who in their right mind would invent such a thing as homework?ā | learn more
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The best science isnāt peer-reviewed yet. Thereās a unique problem that comes with a formal peer-review publication process. āWeāre going to kill ourselves because of stupidity.ā | learn more
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Founding vs inheriting institutions. Inside this post Balaji describes a concept of read-only culture: āthe ability to repeat what an ancestor has handed down ā but not recreate it from first principles.ā It reminds me of cargo cults a bit. | learn more
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How did the feds recover the ransomware Bitcoin payment? āOn June 7, the United States Justice Department and the Federal Bureau of Investigation (FBI) announced the ārecoveryā of 63.70 bitcoin from the funds Colonial Pipeline sent to the hackers. The official story has a number of inconsistencies and federal investigators did not disclose how the FBI was able to confiscate the Darkside gangās private key.ā | learn more
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