#tax equity

[mostlysignssomeportents]

Private equity rips off its investors, too

I'm coming to DEFCON! TOMORROW (Aug 9), I'm emceeing the EFF POKER TOURNAMENT (noon at the Horseshoe Poker Room), and appearing on the BRICKED AND ABANDONED panel (5PM, LVCC - L1 - HW1–11–01). On SATURDAY (Aug 10), I'm giving a keynote called "DISENSHITTIFY OR DIE! How hackers can seize the means of computation and build a new, good internet that is hardened against our asshole bosses' insatiable horniness for enshittification" (noon, LVCC - L1 - HW1–11–01).

It's amazing how many of the scams that have devastated our economy and everyday people owe their success to the fact that we assume that rich people know what they're doing, so if they're doing something, it must be real.

Think of how many people lost everything by gambling on junk bonds, exotic mortgage derivatives, cryptocurrency and web3, because they saw that the largest financial institutions in the world were going all-in on these weird, incomprehensible bets.

Then there are the people who are convinced that online advertising is built around a mind-control ray, because tech companies claim that's what they have ("I am an evil dopamine-loop-hacking wizard and I can sell anything to anyone!"), and because huge, sober blue-chip companies hand billions to these soi dissant svengalis. Sure, online ads are a swamp of clickfraud and garbage, but would these super smart captains of industry spend so much on online advertising if it didn't work super-well?

http://pluralistic.net/HowToDestroySurveillanceCapitalism

From our worms'-eye-view here on the ground, it's easy to assume that rich people and the people who sell them stuff are all on the same side. "If you're not paying for the product, you're the product," right? If Facebook is tormenting you with surveillance advertising, it must be doing so on behalf of the surveillance advertisers, for whom Mark Zuckerberg has bottomless reservoirs of honest, forthright impulses.

The reality is simultaneously weirder, and obvious in hindsight. The reason Zuck is tormenting you is that he's a remorseless sociopath who doesn't care who he hurts. He rips off everyone he can rip off, and that includes advertisers, who have seen steady price-hikes and lower-fidelity targeting, even as ad-fraud has skyrocketed while Facebook draws down its anti-fraud spending:

https://www.404media.co/where-facebooks-ai-slop-comes-from/

This is not to say that Facebook advertisers have your best interests at heart, that they aren't engaged in active deception in order to better themselves at your expense. Rather, it's to say that there's no honor among thieves, and Zuck is an equal-opportunity predator. Moreover, both Zuck and his advertisers are credulous dolts, so the mere fact that they are pouring money into something (advertisers: FB ads; Zuck: metaverse) it doesn't follow that these are real or important or the coming thing.

For me, the Ur-example of "rich people are dumb, even when it comes to money" is the private equity sector. I've written a lot about PE, and how destructive it is to the real economy, from Toys R Us to pet grooming:

https://pluralistic.net/2024/08/05/rugged-individuals/#misleading-by-analogy

How they killed Red Lobster:

https://pluralistic.net/2024/05/23/spineless/#invertebrates

And how they actually created the death panels that Sarah Palin warned us about (it's OK, though: these death panels are run by the efficient private sector, not government bureaucrats):

https://pluralistic.net/2023/04/26/death-panels/#what-the-heck-is-going-on-with-CMS

The devastating effect of private equity on the real economy is increasingly well understood, and a curious side-effect of this is that people assume that if PE is destroying their lives, they must be doing so on behalf of their investors, who are making bank.

But – like Zuck – PE bosses are just as happy to steal from their investors as they are to to steal from the workers and customers of the businesses they acquire on those investors' behalf. They swaddle this theft in performative complexity and specialized jargon, but when you strip all that away, you find more fraud.

All the misery that PE inflicts on workers, communities and customers are just a convincer in a Big Store con, a bid to make the scam seem credible. For a certain kind of investor, any economic activity that destroys communities and workers' livelihoods must be a good bet. This is the dynamic at work in the pitch of AI image-generator companies, who spend tens of billions on technology that there is no substantial market for:

https://pluralistic.net/2024/07/25/accountability-sinks/#work-harder-not-smarter

AI image generators represent a high-profile, extremely visible example of "a job that AI can do." Nevermind that AI illustration went from a novelty to a tired cliche in less than a year. Even if you think that AI illustrations are a perfect substitute for commercial illustrations, that still won't come anywhere near making AI companies a profit. Add up the entire wage bill for every commercial illustrator in the world, hand it to Open AI, and you're not even gonna cover the kombucha budget for Open AI's staff kitchens.

Hell, all the wages of every commercial illustrator that ever lived won't pay back even a fraction of the money the AI companies spent on image generators. The pauperization of an entire class of creative workers is just a canned demo, a way to fool investors into thinking that there is a whole universe of similarly situated workers whose wages can be diverted to AI companies. This is the logic of small-time spammers, scaled up to the scale of the entire S&P 500. Smalltime spammers looked at AI and thought, "OK, I can generate as much botshit as I want on demand for free. Science fiction magazines pay $0.10/word. So if I generate a billion words, I'll get $100 million." But that's not how any of that works: sf magazines don't buy botshit, and even if they did, the entire market for short fiction adds up to what Sam Altman spends on a single designer t-shirt. The point of destroying these beloved, useful things isn't to make a lot of money by taking their markets – it's to convince dopey, panicked rich people to give you lots of money you can steal, because they think you can do this to every market and they don't want to miss out on the opportunity of a lifetime:

https://pluralistic.net/2024/01/15/passive-income-brainworms/#four-hour-work-week

Take "divi recaps": after a private equity firm acquires a company (by borrowing money against its assets), it typically declares a "special dividend," emptying out the company's cash reserves and pocketing them. A "divi recap" is when PE then takes out another massive loan against the company's (remaining) assets and pockets that:

https://pluralistic.net/2020/09/17/divi-recaps/#graebers-ghost

All of this happens under an opaque cloud, thanks to the light-to-nonexistent disclosure rules for PE. A public company has to open its books for the SEC, its investors, and the world. PE is private – and so are its finances. It is absolutely routine for PE bosses to put their spouses, kids, and pals on the payroll and hand them millions for doing little to nothing, all at the expense of their investors:

https://www.nakedcapitalism.com/2022/02/sec-set-to-lower-massive-boom-on-private-equity-industry.html

PE bosses charge huge fees to their investors – not merely the usual 2-and-20 (2% of the funds under management and 20% of any profits) – but also a wide variety of special one-off fees that pile to the sky. They also dip into their investors' funds to issue themselves massive loans that they use to make side-bets, without telling the investors about it:

https://pluralistic.net/2022/02/10/monopoly-begets-monopoly/#gary-gensler

PE investors are chickens ripe for the plucking: take "continuation funds," which allow PE bosses to soak the rich people and pension funds who supply them with billions:

https://news.bloomberglaw.com/mergers-and-acquisitions/matt-levines-money-stuff-buyout-funds-buy-from-themselves

Remember 2-and-20? 2% of all the money you manage, every year, and 20% of all the profits. You'd think that these would be somewhat zero sum, right? If you use some of your investors' cash to buy a company, and then sell off that company for a profit, you get the 20%, but now the pot of money you're managing has gone down by the amount you used to buy the company, and so your 2% carry goes down, too.

But what if you sell your portfolio companies to yourself, using your investors' own money? When you do that, you continue to hold the company on your PE firm's books, meaning you continue to get the 2% carry, and you can pocket 20% of the sale price as a "profit":

https://pluralistic.net/2023/07/20/continuation-fraud/#buyout-groups

This is straight-up fraud, wrapped up in so much jargon that it can successfully masquerade as "financial engineering" ("financial engineering" is really just a euphemism for "fraud"). PE bosses keep coming up with new, exotic ways to steal from their investors. The latest scam is "tax receivable agreements":

https://archive.ph/RczJ9

On its face, this is a tax scam. When a company goes public, early investors generally hold stock in the original partnership or LLC; this company ends up holding a ton of shares in the new, public company. When they sell those non-public shares in the LLC, this creates a (potentially gigantic) tax credit.

A TRA hustle involves tracking down these LLC shareholders and convincing them to sign off on dumping the LLC's shares, which generates a huge tax credit for the public company. The hustler offers to split these credits with the LLC holders.

All of this is especially attractive to PE bosses, who often take a company private, do a bunch of "financial engineering" and then take it public again, leaving the PE firm as the owner of those LLC shares that can be converted to a TRA and a huge windfall – which the PE bosses pocket, because they (not their investors) are holding those credits.

This scam is really doing big numbers. KKR – the monsters who killed Toys R Us – just diverted $650 million in TRA loot, prompting a lawsuit from Steamfitters union pension fund, which had handed these jerks millions of its members' money to gamble with:

https://archive.ph/kqQvI

This highlights another very weird aspect of the PE scam: they are absolutely dependent on pension funds. To add insult to injury, PE funds are notorious union-busters – they use union money to buy companies and destroy their unions:

https://pluralistic.net/2023/10/05/mr-gotcha/#no-ethical-consumption-under-capitalism

People who try to understand the PE business model often give up, because it seems to make no sense, leading many to assume that they're too unsophisticated to grasp the complex financials here. For example, PE is absolutely dependent on massive loans as a way of looting its businesses, but it also often defaults on those loans. Why do banks and investors keep making huge loans to PE deadbeats? Because – like the PE fund investors – they are credulous dolts.

The reason PE seems like a scam is that it is a scam. It is a fractal scam – every part of it is a scam. You might have heard about the "carried interest" tax loophole that allows PE bosses to avoid billions in taxes on the money they steal from their investors, creditors, workers and customers. Most people assume "carried interest" has something to do with "interest" on a loan. Nope: "carried interest" is a 16th century nautical tax rule designed for mercantalist sea-captains who had an "interest" in the cargo they "carried":

https://pluralistic.net/2021/04/29/writers-must-be-paid/#carried-interest

But rich people and other "sophisticated investors" (like pension fund investment managers) are no smarter than the rest of us. They are herd animals. When they see other rich people piling into some scheme or asset class, they rush to join them, which makes the asset price go up, which makes them think they're smart (until the inevitable rug-pull). When one plute jumps off the Empire State Building, the rest of them jump, too.

Which is why there's more money flooding into PE than at any time in history, $2.62T in "dry powder," handed over to greedy, thieving PE bosses in a poker game where everyone is the sucker at the table:

https://www.institutionalinvestor.com/article/2di1vzgjcmzovkcea8f0g/portfolio/private-equitys-dry-powder-mountain-reaches-record-height

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/08/08/sucker-at-the-table/#clucks-definance

[thedashproject]

[justinspoliticalcorner]

Chabeli Carranzana at The 19th:

For close to a decade, periods — yes, menstrual periods — had been one of those rare issues that could win legislative support in blue states and red ones.  Starting in about 2016, legislators from California to Alabama had been passing bills mandating that tampons and pads be readily available in public spaces — especially schools — after researchers found that students who don’t have access to these products miss days as a result. These students are facing what advocates call “period poverty,” meaning that they or their families can’t afford to buy menstrual supplies, which can cost upwards of $20 per cycle. It’s also an issue that particularly affects Black and Latinx people. 

For years, school nurses had been one of the only resources for students in need, many of them paying out-of-pocket for the products themselves. Legislators then successfully argued that schools should be providing those items. For a time, it was a winning strategy — an easy, bipartisan piece of legislation. Then something shifted. As anti-transgender rhetoric has picked up momentum in state chambers, period poverty bills have been caught in the crosshairs. Numerous states have passed legislation that bans trans and nonbinary students from using restrooms or playing on sports teams that align with their gender identity. The Republicans who support the anti-trans legislation say it’s needed to protect women and girls from “predators” who may pose as transgender women in restrooms.

Suddenly a topic just about everyone could agree on became a “liberal” policy, a threat to girls, a method of encouraging kids to be trans or nonbinary, or a way that Republican lawmakers could get “tricked” into supporting legislation that might mean a trans student could get a period product inside a boys’ bathroom.  Bathrooms somehow became a space that needed to be policed, said Rashanna Lee, the state policy analyst at the Equality Federation, an advocacy organization that works at the state level to protect LGBTQ+ rights. 

[...] The new scrutiny over which kids can use which bathrooms meant that legislators started reworking their bills to make them less gender-inclusive. Originally, much of the proposed legislation simply required the products to be available in  students’ bathrooms, an acknowledgment that some trans and nonbinary students have periods and need the products, too. But legislators, like those in Alabama in 2022, rewrote the bills to specify that “female students” be given products “through a female school counselor, female nurse, or female teacher.” Republican lawmakers in Minnesota tried and failed to change the language in the bill to only say “female restrooms.” Other states, like Idaho, were more explicit. When the Idaho state House took up the issue in March 2023, Rep. Rod Furniss, the Republican sponsor of the bill, specified that the products were to be only in “female or unisex” bathrooms and not “male” ones.  “We put in the language ‘not in boys’ restrooms’ because in Idaho, we believe there’s a difference between boys and girls,” he said in the House chambers during debate on the bill. “We believe that strongly.”  Furniss told the chamber that boys and girls have “two p’s — peeing and pooping” but he jokingly said he was “surprised” to learn in 2023 that girls also had a third p — periods.  “With the third p, the girls don’t have a muscle down there. It’s an emergency every time that happens,” Furniss said, adding that he “didn’t know much about this bill” that he’d sponsored, though he is the father of four girls.  However, “one thing I know,” he said, “is that boys and girls are different — one has two p’s, one has three p’s. In Idaho we believe they are different. We don’t let boys go in girls’ bathrooms, we don’t let girls go in boys’ bathrooms — we know they’re different. That’s an Idaho standard.”

[...] Still, the recent pushback created by growing anti-trans sentiment has made the conversation more complicated. That, too, is an issue of education, Strausfeld said. Period product access is an economic issue, and many legislators don’t understand the realities of trans and nonbinary people, who already experience higher rates of unemployment and poverty. Trans women, in particular, face one of the widest gender pay gaps of any group.

While some public women’s restrooms offer the products — oftentimes for a fee — men’s restrooms rarely do. It’s the same dynamic in homeless shelters: the products are typically available at women’s shelters, but not men’s. Trans and nonbinary people may also need menstrual products for other reasons, including following medical procedures such as a vaginoplasty. Public assistance programs that help people afford food and other necessities, like SNAP and WIC, the program for low-income women and children, do not allow participants to use the funds to purchase menstrual products.  As a result, Black and Brown trans and nonbinary students, who are at the intersection of racial and gender disparities, face period poverty most acutely, said Lee of the Equality Federation.

Up until the last couple of years ago, menstrual equity policies such as tampons and pads in school bathrooms were a bipartisan issue. Now, as a result of the anti-trans (and anti-LGBTQ+) hysteria-fueled campaign by Republicans, period products got turned into a partisan issue (see the “Tampon Tim” insult lobbed at Tim Walz).

[myopinionisimportant]

"Planning a podcast" in the sense that I am looking into recording locations and working on audition material and making sure I have backup plans in case people get sick and all that

but also in the sense that I'm reading the corporations act to try and figure out how small businesses work, and wondering if I can set up a company and what would be the implications of using the company to buy the new laptop and shiny logo I'm gonna want

[swarajpro]

Exploring Peer-to-Peer Investments Through a P2P Lending Platform in Jabalpur

In today's fast-changing financial world, investors continually seek avenues to grow their finances while being mindful of risks. However, many individuals primarily focus on mutual funds and stocks for investment, unaware of the broader spectrum of available options. Let's explore the challenges investors face and learn how a P2P lending platform in Jabalpur helps them with the best investment opportunities.

Understanding Investor Challenges in Alternate Investment Avenues

As people try to make more money from their investments, they face problems because they don’t know about different ways to invest.

High Barriers to Entry:Investing in assets like real estate demands substantial capital, thus limiting access for many investors to diversify their portfolios effectively.

Opaque Investment Processes:Traditional investment structures can be complex and difficult to comprehend, making it challenging for investors to understand underlying risks and potential returns.

Lack of Information:Not having enough details about where to invest can make it tough to choose the right option. This might make people hesitant to invest at all.

Low Returns:Sometimes, the money invested doesn't grow much, offering lower profits compared to what people expected.

Limited Diversification:Investors might not have enough different types of investments. This lack of variety can make their money more at risk if one investment doesn’t do well.

Lack of Personalised Recommendations:Generic investment advice fails to cater to individual financial goals, risk appetites, and investment horizons, impacting the relevance of investment decisions.

The Potential of P2P Investments in India

Mutual funds are a reliable investment avenue today, but there are more such promising asset classes unexplored by investors. Swaraj FinPro, the best mutual funds investment services in Jabalpur, offers investments in one such asset class with Peer-to-peer (P2P) lending, backed by RBI guidelines where individuals can lend their money on higher interest while other individuals borrow funds from multiple investors through a digital platform. This transformative approach creates a marketplace connecting borrowers and lenders, facilitating secured personal loans while managing the loan life cycle to provide monthly returns to lenders. Here are the benefits of P2P lending platforms for investors:

Higher Potential Returns

P2P lending platforms typically yield higher interest rate to investors, compared to conventional savings accounts and investors can potentially benefit from higher returns up to 12%*.

Diversification Opportunities

By investing across a variety of borrowers on P2P platforms, investors can spread their risk and potentially increase returns by diversifying their investments.

Accessibility and Specific Advantages

P2P lending provides access to investments previously unavailable through traditional channels. Investors can participate with smaller investment amounts, diversify portfolios, and select the tenure.

Passive Income

P2P lending allows investors to earn interest regularly, providing a potential source of passive income.

Potential for Higher Yields

As investors can choose the tenure and interest rates they are willing to accept for lending, there's potential for higher yields based on their risk appetite.

Tailoring Investments for Investors

Swaraj FinPro empowers investors in Jabalpur and pan India to explore P2P lending as an accessible, reliable, and potentially lucrative avenue for diversification and growth within their investment portfolios. P2P lending works well because it's clear, gives different choices, and doesn’t lock your money away for too long.

[bondsindia]

Tax-Free Bonds vs Equity Investments

Tax-free bonds and equity investments are two different investment options with their own advantages and disadvantages. The choice between the two depends on your individual financial goals, risk appetite, and investment horizon.

Tax-free bonds are issued by government entities and are exempt from income tax. They offer fixed returns for a specified period of time, typically 10, 15, or 20 years. These bonds are considered low-risk investments and are suitable for investors who prioritize safety and stable returns over high-risk, high-reward investments.

On the other hand, equity investments involve buying shares of companies in the stock market. Equity investments are higher-risk investments than tax-free bonds, but they offer the potential for higher returns over the long term. Equity investments require a longer investment horizon and are suitable for investors who can tolerate volatility and are willing to stay invested for an extended period.

When deciding between tax-free bonds and equity investments, you should consider your investment goals, risk tolerance, and time horizon. If you prioritize safety and stable returns, tax-free bonds may be a good option. If you are willing to take on more risk for the potential of higher returns over the long term, equity investments may be a better fit.

It's important to note that diversification is key to a successful investment portfolio. Consider investing in a mix of asset classes, including tax-free bonds and equities, to spread out your risk and increase your chances of achieving your financial goals. It's always a good idea to consult with a financial advisor to determine the best investment strategy for your individual needs.

Visit us for more information:- https://medium.com/@dhherajjhunjhunwala/tax-free-bonds-vs-equity-investments-understanding-the-key-differences-296a526d187b

[trendynewsnow]

Luc Besson Calls for Higher Taxes on the Wealthy in France

Luc Besson Advocates for Increased Taxation on Wealthy Individuals Renowned French director Luc Besson, known for his iconic films such as Leon, The Fifth Element, and the recent Dogman, has publicly expressed his support for higher taxes on affluent citizens. In a candid interview with the French publication La Tribune, Besson voiced his concerns over the growing wealth disparity that has been…

[trading-trending]

[agnitfinvest]

Why Does a Mutual Fund Distributor in Gurugram Suggest Investing in Mutual Funds?

In today’s financial landscape, mutual funds offer numerous benefits that many investors may not fully understand. That’s where a mutual fund distributor in Gurugram can be invaluable, helping investors make informed decisions. Here are five reasons they might suggest adding mutual funds to your portfolio.

What Are Mutual Funds?

Mutual funds pool money from investors to build a diversified portfolio of stocks, bonds, or other securities. Managed by professionals, these funds provide potential growth, income, and stability.

Reasons to Invest in Mutual Funds

Professional Management and Expertise Mutual funds are managed by experienced professionals who make informed investment decisions on your behalf. This is ideal for investors who lack the time or knowledge to manage their own investments. Agnit Finvest, a mutual funds advisor in Gurugram can guide you in selecting funds that match your financial goals, leveraging the expertise of fund managers to maximize returns.

Diversification for Reduced Risk Mutual funds spread your investment across a variety of assets, helping to balance the risk. If one asset underperforms, the effect on your overall investment is minimized. A professional can help tailor your portfolio to your risk tolerance, giving you a more balanced and resilient investment.

Flexibility and Accessibility Mutual funds offer a range of options to fit different goals, from equity funds for growth to debt funds for stability. They’re also easy to buy and redeem, making them accessible for new and seasoned investors alike. A professional can recommend funds based on your unique needs, ensuring your portfolio remains flexible and aligned with your objectives.

Systematic Investment Plan (SIP) Options SIPs allow you to invest a fixed amount regularly, building wealth over time. This disciplined approach enables you to benefit from rupee cost averaging, which reduces the impact of market volatility. A professional can assist in setting up a SIP that matches your budget and financial goals, helping you invest consistently.

Potential for Higher Returns Compared to Traditional Investments Mutual funds, particularly equity funds, can generate higher returns over time compared to fixed deposits or savings accounts. While traditional investments offer stability, mutual funds offer growth potential, especially in the long term. A professional can help you select funds that provide a balance of growth and security to meet your financial objectives.

Conclusion

​Mutual funds offer a simple, convenient and affordable way to invest and grow wealth over time. But since it involves market risks it's always better to seek help from professionals, so that you make informed decisions always.

[mostlysignssomeportents]

The tax sharks are back and they’re coming for your home

I'm touring my new, nationally bestselling novel The Bezzle! Catch me TODAY (Apr 27) in MARIN COUNTY, then Winnipeg (May 2), Calgary (May 3), Vancouver (May 4), and beyond!

One of my weirder and more rewarding hobbies is collecting definitions of "conservativism," and one of the jewels of that collection comes from Corey Robin's must-read book The Reactionary Mind:

https://en.wikipedia.org/wiki/The_Reactionary_Mind

Robin's definition of conservativism has enormous explanatory power and I'm always finding fresh ways in which it clarifies my understand of events in the world: a conservative is someone who believes that a minority of people were born to rule, and that everyone else was born to follow their rules, and that the world is in harmony when the born rulers are in charge.

This definition unifies the otherwise very odd grab-bag of ideologies that we identify with conservativism: a Christian Dominionist believes in the rule of Christians over others; a "men's rights advocate" thinks men should rule over women; a US imperialist thinks America should rule over the world; a white nationalist thinks white people should rule over racialized people; a libertarian believes in bosses dominating workers and a Hindu nationalist believes in Hindu domination over Muslims.

These people all disagree about who should be in charge, but they all agree that some people are ordained to rule, and that any "artificial" attempt to overturn the "natural" order throws society into chaos. This is the entire basis of the panic over DEI, and the brainless reflex to blame the Francis Scott Key bridge disaster on the possibility that someone had been unjustly promoted to ship's captain due to their membership in a disfavored racial group or gender.

This definition is also useful because it cleanly cleaves progressives from conservatives. If conservatives think there's a natural order in which the few dominate the many, progressivism is a belief in pluralism and inclusion, the idea that disparate perspectives and experiences all have something to contribute to society. Progressives see a world in which only a small number of people rise to public life, rarified professions, and cultural prominence and assume that this is terrible waste of the talents and contributions of people whose accidents of birth keep them from participating in the same way.

This is why progressives are committed to class mobility, broad access to education, and active programs to bring traditionally underrepresented groups into arenas that once excluded them. The "some are born to rule, and most to be ruled over" conservative credo rejects this as not just wrong, but dangerous, the kind of thing that leads to bridges being demolished by cargo ships.

The progressive reforms from the New Deal until the Reagan revolution were a series of efforts to broaden participation in every part of society by successively broader groups of people. A movement that started with inclusive housing and education for white men and votes for white women grew to encompass universal suffrage, racial struggles for equality, workplace protections for a widening group of people, rights for people with disabilities, truth and reconciliation with indigenous people and so on.

The conservative project of the past 40 years has been to reverse this: to return the great majority of us to the status of desperate, forelock-tugging plebs who know our places. Hence the return of child labor, the tradwife movement, and of course the attacks on labor unions and voting rights:

https://pluralistic.net/2022/11/06/the-end-of-the-road-to-serfdom/

Arguably the most potent symbol of this struggle is the fight over homes. The New Deal offered (some) working people a twofold path to prosperity: subsidized home-ownership and strong labor protections. This insulated (mostly white) workers from the two most potent threats to working peoples' lives and wellbeing: the cruel boss and the greedy landlord.

But the neoliberal era dispensed with labor rights, leaving the descendants of those lucky workers with just one tool for securing their American dream: home-ownership. As wages stagnated, your home – so essential to your ability to simply live – became your most important asset first, and a home second. So long as property values rose – and property taxes didn't – your home could be the backstop for debt-fueled consumption that filled the gap left by stagnating wages. Liquidating your family home might someday provide for your retirement, your kids' college loans and your emergency medical bills.

For conservatives who want to restore Gilded Age class rule, this was a very canny move. It pitted lucky workers with homes against their unlucky brethren – the more housing supply there was, the less your house was worth. The more protections tenants had, the less your house was worth. The more equitably municipal services (like schools) were distributed, the less your house was worth:

https://pluralistic.net/2021/06/06/the-rents-too-damned-high/

And now that the long game is over, they're coming for your house. It started with the foreclosure epidemic after the 2008 financial crisis, first under GW Bush, but then in earnest under Obama, who accepted the advice of his Treasury Secretary Timothy Geithner, who insisted that homeowners should be liquidated to "foam the runways" for the crashing banks:

https://pluralistic.net/2023/03/06/personnel-are-policy/#janice-eberly

Then there are scams like "We Buy Ugly Houses," a nationwide mass-fraud outfit that steals houses out from under elderly, vulnerable and desperate people:

https://pluralistic.net/2023/05/11/ugly-houses-ugly-truth/#homevestor

The more we lose our houses, the more single-family homes Wall Street gets to snap up and convert into slum properties, aslosh with a toxic stew of black mold, junk fees and eviction threats:

https://pluralistic.net/2022/02/08/wall-street-landlords/#the-new-slumlords

Now there's a new way for finance barons the steal our houses out from under us – or rather, a very old way that had lain dormant since the last time child labor was legal – "tax lien investing."

Across the country, counties and cities have programs that allow investment funds to buy up overdue tax-bills from homeowners in financial hardship. These "investors" are entitled to be paid the missing property taxes, and if the homeowner can't afford to make that payment, the "investor" gets to kick them out of their homes and take possession of them, for a tiny fraction of their value.

As Andrew Kahrl writes for The American Prospect, tax lien investing was common in the 19th century, until the fundamental ugliness of the business made it unattractive even to the robber barons of the day:

https://prospect.org/economy/2024-04-26-investing-in-distress-tax-liens/

The "tax sharks" of Chicago and New York were deemed "too merciless" by their peers. One exec who got out of the business compared it to "picking pennies off a dead man’s eyes." The very idea of outsourcing municipal tax collection to merciless debt-hounds fell aroused public ire.

Today – as the conservative project to restore the "natural" order of the ruled and the ruled-over builds momentum – tax lien investing is attracting some of America's most rapacious investors – and they're making a killing. In Chicago, Alden Capital just spent a measly $1.75m to acquire the tax liens on 600 family homes in Cook County. They now get to charge escalating fees and penalties and usurious interest to those unlucky homeowners. Any homeowner that can't pay loses their home.

The first targets for tax-lien investing are the people who were the last people to benefit from the New Deal and its successors: Black and Latino families, elderly and disabled people and others who got the smallest share of America's experiment in shared prosperity are the first to lose the small slice of the American dream that they were grudgingly given.

This is the very definition of "structural racism." Redlining meant that families of color were shut out of the federal loan guarantees that benefited white workers. Rather than building intergenerational wealth, these families were forced to rent (building some other family's intergenerational wealth), and had a harder time saving for downpayments. That meant that they went into homeownership with "nontraditional" or "nonconforming" mortgages with higher interest rates and penalties, which made them more vulnerable to economic volatility, and thus more likely to fall behind on their taxes. Now that they're delinquent on their property taxes, they're in hock to a private equity fund that's charging them even more to live in their family home, and the second they fail to pay, they'll be evicted, rendered homeless and dispossessed of all the equity they built in their (former) home.

It's very on-brand for Alden Capital to be destroying the lives of Chicagoans. Alden is most notorious for buying up and destroying America's most beloved newspapers. It was Alden who bought up the Chicago Tribune, gutted its workforce, sold off its iconic downtown tower, and moved its few remaining reporters to an outer suburban, windowless brick building "the size of a Chipotle":

https://pluralistic.net/2021/10/16/sociopathic-monsters/#all-the-news-thats-fit-to-print

Before the ghastly hotel baroness Leona Helmsley went to prison for tax evasion, she famously said, "We don't pay taxes; only the little people pay taxes." Helmsley wasn't wrong – she was just a little ahead of schedule. As Propublica's IRS Files taught us, America's 400 richest people pay less tax than you do:

https://pluralistic.net/2022/04/13/for-the-little-people/#leona-helmsley-2022

When billionaires don't pay their taxes, they get to buy sports franchises. When poor people don't pay their taxes, billionaires get to steal their houses after paying the local government an insultingly small amount of money.

It's all going according to plan. We weren't meant to have houses, or job security, or retirement funds. We weren't meant to go to university, or even high school, and our kids were always supposed to be in harness at a local meat-packer or fast food kitchen, not wasting time with their high school chess club or sports team. They don't need high school: that's for the people who were born to rule. They – we – were meant to be ruled over.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/04/26/taxes-are-for-the-little-people/#alden-capital

[ivygorgon]

DO NOT DEFUND THE IRS! Tax the rich!

An open letter to the U.S. Congress

1,016 so far! Help us get to 2,000 signers!

I am writing to urge you to fully fund IRS enforcement efforts in the FY2025 budget and reject any cuts since they would benefit tax-evading millionaires and billionaires. The IRS recently recovered $263 MILLION from a single wealthy tax cheat who had been running an offshore tax evasion scheme for over a decade. This massive recovery demonstrates the critical importance of robust IRS enforcement capabilities. Since receiving increased funding, the IRS has collected over $1 billion in back taxes from millionaire tax cheats in less than a year. This money is being used to fund vital public services and reduce the deficit. However, I am deeply concerned by House Republicans' proposal to slash $2 billion from the IRS enforcement budget. This reckless cut would deliberately cripple the agency's ability to go after wealthy tax evaders, effectively siding with high-end tax cheats at the expense of honest taxpayers and crucial public investments. Every dollar cut from IRS enforcement is a gift to ultra-wealthy tax cheats and a blow to working families who pay their fair share of taxes. The proposed $2 billion cut could prevent the recovery of exponentially more in unpaid taxes owed by the rich. As your constituent, I strongly urge you to: — Fully fund IRS enforcement efforts in the FY2025 budget — Reject any cuts to IRS enforcement capabilities — Support measures to further strengthen the IRS's ability to crack down on wealthy tax evaders Billionaires and massive corporations should not be allowed to shirk their obligations while the rest of us play by the rules. A well-funded IRS helps level the playing field and ensures everyone pays what they owe. Thank you for your attention to this critical issue. I look forward to hearing how you plan to protect IRS enforcement funding and stand up for tax fairness.

▶ Created on October 3 by Jess Craven

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[digital288]

Tax Benefits of Investing in Mutual Funds

When it comes to building wealth while minimizing your tax liabilities, mutual funds are a smart choice for many investors. Did you know that more than 6 crore people in India invest in mutual funds, and the industry's assets under management (AUM) crossed ₹46 trillion in 2023? That’s massive growth in just a few years.

But aside from potential market gains, mutual funds also offer a range of tax benefits that make them even more attractive. In this article, we’ll explore the various tax benefits of investing in mutual funds, making it easier for you to decide how to best grow your wealth.

1. Tax-Saving with ELSS (Equity Linked Savings Scheme)

One of the best tax-saving options under mutual funds is the Equity Linked Savings Scheme (ELSS). This is a type of equity mutual fund that qualifies for tax deductions under Section 80C of the Income Tax Act.

You can claim a deduction of up to ₹1.5 lakh in a financial year by investing in ELSS. What makes ELSS even more attractive is that it has the shortest lock-in period of just three years, compared to other tax-saving instruments like PPF (15 years) and NSC (5 years).

ELSS investments are primarily in equities, which means that they also offer good potential for long-term wealth creation.

2. Long-Term Capital Gains (LTCG) on Equity Funds

Equity mutual funds, where at least 65% of the assets are invested in equities, are subject to long-term capital gains tax. Here’s where the good news comes in: gains of up to ₹1 lakh in a financial year are tax-free. That’s right, no tax is levied if your long-term capital gains on equity mutual funds don’t exceed ₹1 lakh annually.

For gains exceeding ₹1 lakh, you’ll be taxed at 10%, but that’s still relatively low compared to other investment avenues. Plus, you only have to pay this tax if you hold your equity mutual fund units for over a year, making it a win-win situation for long-term investors.

3. Tax Benefits for Debt Funds

If you’re more risk-averse and prefer to invest in debt mutual funds, there are tax benefits here too. Debt funds are taxed differently from equity funds, but they still offer tax efficiency, especially for long-term investors.

For debt funds, if you hold your investment for more than three years, your gains are considered long-term capital gains (LTCG) and are taxed at 20% after allowing for indexation benefits. Indexation helps in adjusting the purchase price for inflation, thereby reducing the taxable gains, and in turn, your tax liability. In a nutshell, you end up paying tax only on the ‘real’ gains after inflation adjustments, which is pretty neat!

4. Dividend Distribution Tax (DDT) Abolished

Until recently, dividends from mutual funds were subject to a Dividend Distribution Tax (DDT), which was deducted before the dividend was paid out. However, in the Union Budget 2020, DDT was abolished. Now, dividends are taxed at the hands of the investor according to their income tax slab. While this isn’t necessarily a “benefit,” it does provide clarity and transparency in how your mutual fund dividends are taxed.

For those in lower tax slabs, this change could actually result in lower taxes on dividends than the flat DDT rate that was previously applicable.

5. SIPs and Tax Efficiency

Investing through a Systematic Investment Plan (SIP) is not only a disciplined way to invest but also a tax-efficient one. Each SIP installment is considered a separate investment for tax purposes. So, when calculating long-term capital gains, the holding period for each SIP starts from the date of that particular installment.

This means you can strategically time the sale of your SIP units to minimize taxes. For example, if you invest monthly via SIP and redeem your units after one year, only those installments that have completed a one-year holding period will be subject to the long-term capital gains tax, offering you flexibility and control over your tax liabilities.

6. Tax Benefits on SWP (Systematic Withdrawal Plan)

For investors looking for a steady income, a Systematic Withdrawal Plan (SWP) is a great option. When you withdraw money from your mutual fund through an SWP, only the gains portion of the withdrawal is subject to tax. The principal amount is not taxed.

Additionally, if your SWP is set up in an equity mutual fund, your gains will be subject to the same LTCG tax benefits discussed earlier. For debt mutual funds, you can benefit from indexation, making it a tax-efficient way to create a regular income stream.

7. Tax Efficiency in Retirement Planning

Mutual funds, particularly ELSS and balanced funds, can play a significant role in your retirement planning. Not only do they offer the potential for higher returns, but they also allow you to take advantage of tax benefits during your working years. By investing regularly in tax-saving mutual funds, you can reduce your taxable income and simultaneously grow your retirement corpus.

Additionally, when you begin to withdraw from your mutual fund investments in retirement, you can plan your withdrawals to take advantage of lower capital gains taxes.

Conclusion

Investing in mutual funds is not just about growing your wealth; it’s also about being tax smart. Whether you’re investing in ELSS for tax savings, using SIPs for long-term gains, or benefiting from the tax efficiency of debt funds, mutual funds offer numerous tax benefits. The key is to understand the taxation rules and plan your investments accordingly.

With mutual funds, you can enjoy the dual benefit of wealth creation and tax efficiency, helping you reach your financial goals faster while keeping the taxman at bay. So, why wait? Start investing today contact mutual fund advisor now and make the most of these tax benefits!

[reitmonero]

Exploring Home Equity Loan Options for Self-Employed Individuals

Understanding Home Equity Loans

A home equity loan allows you to borrow money by using the value of your home as collateral. Essentially, you take out a loan against the equity you’ve built up in your property. For self-employed individuals, this type of loan can be a useful tool for financing business needs or personal expenses.

Key Considerations for Self-Employed Borrowers

**1. **Proving Income: Unlike traditional employees with W-2 forms, self-employed individuals may face more scrutiny when proving their income. Lenders typically require detailed documentation to assess your ability to repay the loan.

**2. **Income Documentation: Prepare to provide comprehensive documentation, including:

Tax Returns: Usually for the past two years.

Profit and Loss Statements: Detailed accounts showing your business income and expenses.

Bank Statements: To verify your financial stability.

**3. *Credit Score:* Your credit score plays a crucial role in determining your loan terms. Self-employed individuals should ensure their credit is in good standing to secure favorable rates.

**4. *Debt-to-Income Ratio:* Lenders assess your ability to manage monthly payments by comparing your debt to your income. Maintaining a favorable ratio can improve your chances of approval.

**5. *Business Stability:* Demonstrating a stable and profitable business can enhance your credibility as a borrower. Long-term business success signals reliability to lenders.

**6. *Loan Terms:* Be mindful of the terms offered, including interest rates, repayment periods, and fees. Compare options from various lenders to find the most suitable terms for your situation.

Steps to Apply

Assess Your Equity: Determine the amount of equity you have in your home. This is the difference between your home’s market value and any existing mortgage balance.

Gather Documentation: Prepare the necessary financial documents to present to potential lenders.

Shop Around: Research different lenders and compare their loan products. Look for those who specialize in working with self-employed individuals.

Apply: Submit your loan application along with the required documentation. Be prepared for a thorough review process.

Review Offers: Carefully evaluate the offers you receive, considering the interest rates, fees, and terms.

Finalize the Loan: Once you choose a lender, complete the necessary paperwork and finalize the loan agreement.

Benefits of Home Equity Loans

Lower Interest Rates: Compared to unsecured loans, home equity loans often have lower interest rates.

Fixed Payments: Many home equity loans come with fixed interest rates and monthly payments, providing predictability.

Tax Benefits: In some cases, the interest on a home equity loan may be tax-deductible.

Risks to Consider

Risk of Foreclosure: If you fail to repay the loan, your home is at risk of foreclosure.

Impact on Equity: Borrowing against your home reduces the equity you have, which can affect your financial stability if property values decrease.

[brianwilder]

Investment Insights: Why Owning Commercial Real Estate Can Be More Beneficial Than Renting

Investment Insights: Why Owning Commercial Real Estate Can Be More Beneficial Than Renting

In the world of commercial real estate, the decision to own versus rent can significantly impact your financial success and operational stability. Whether you’re a business owner or an investor, understanding the benefits of owning commercial property compared to renting can help you make a more informed decision. Here’s a closer look at why owning commercial real estate often outweighs renting:

Building Equity and Wealth

Owning commercial real estate allows you to build equity and wealth. Each mortgage payment you make contributes to building equity in the property. This equity grows over time as the property appreciates in value and as you pay down the principal balance. Unlike rent payments, which are essentially a cost with no return, owning enables you to build long-term wealth and potentially benefit from the property's increased value.

Predictable Costs

With ownership, you benefit from more predictable costs. When you own a property, your primary expenses include the mortgage, property taxes, insurance, and maintenance. While these costs are relatively stable, rental agreements can include unpredictable rent increases, especially in a competitive market. Ownership allows you to lock in costs and budget more effectively over the long term.

Control Over Your Space

Another significant advantage is the control over your space. Ownership provides greater freedom to customize and renovate the space according to your needs without requiring landlord approval. This flexibility can enhance operational efficiency and create a workspace read more

[republicbusiness]

Budget 2024: Fintech seeks parity in capital gains tax on unlisted equities, check other demands

[financeio]

Home equity loan