Taxes So Simple, They Put CPAs Out of Business
A reader believes there’s a correlation between income tax and a “wealth” tax:
“When the U.S. income tax began only the top 1% had to pay it. Now over 50% of U.S. residents pay income tax each year.
“Can anyone make a credible case that a wealth tax wouldn’t follow the same pattern?”
Per the idea of a flat tax…
“I’ve always been an advocate for a flat tax.
“Get rid of all deductions, credits, tax shelters, trusts and everything under the sun. A simple percentage of all income, whatever that number might be. Everyone would be able to do their own taxes.
“It would save me $2,000 a year to finally get rid of my bland, unemotional accountant!”
Personally, your editor wants a “bland, unemotional” accountant. A live wire, impulsive accountant would not inspire our confidence.
Apologies to accountants everywhere but another reader says the following:
“The idea of a fair/flat tax has been around for some time now and would be a huge improvement over the zillion-page IRS Code.
“Unfortunately, it would probably put a lot of CPAs, tax lawyers and other such folk out of business so I’m sure there’s a tremendous lobby ready to kill it. Too bad… I’ve volunteered for the Fair Tax in my area; lots of people like the idea but that’s about as far as it goes.”
Your Rundown for Monday, Sept. 9, 2019:
The Last Word on Tesla…
Business Insider and others have recently covered Porsche’s launch of the Taycan, an electric vehicle with a price tag approaching $180,000.
And the automotive press has been jazzed over Ford’s (F: NYSE) impending launch of a “Mustang-inspired” electric crossover vehicle.
Ford has an $11 billion commitment and a deal with Rivian – the electric vehicle maker set to launch a pickup in 2020 – to build electric vehicles at an old Mitsubishi plant in Normal, Illinois.
The majority of this recent press mentions Tesla (TSLA: NASDAQ) and poses a question: What does this increased competition mean for Tesla stock?
We’ll get to the answer in just a second…
Last week, a new partner in our business visited us at our office. This man has decades of trading experience on the floor of the NYSE. You’ll meet him soon.
When we gathered in a conference room, our new friend saw five items written on a whiteboard leftover from a meeting a day earlier. They were, in order:
- Beyond Meat (BYND: NASDAQ)
- Interest Rates
The question posed to a group the day before, “What do all five of these things have in common?”
Answer: They will all likely go to zero.
When we said this to our new friend, he disagreed about Tesla, Beyond Meat, and bitcoin.
We’ll save his thoughts on bitcoin and Beyond Meat for another day.
As to Tesla his analysis was simple, and turned into a quick masterclass on the difference between a trade and an investment.
We paraphrase him here: If you like Tesla’s price right now and buy it with no intention of selling it over a period of several years, go for it.
If you think the next piece of news or quarterly report is going to skyrocket Tesla shares and you can make a substantial gain in a short time, you’re playing with fire.
When asked about Elon Musk’s sometimes irrational behavior, quality problems with Tesla cars, and a scattershot outlook, our friend waved his hand.
“Doesn’t matter. That’s all short term noise. The bulls and bears are so deeply entrenched in their opinions at this point there’s no single result or piece of news that’s going to change anyone’s mind. If I were you, I wouldn’t write about Tesla again until the company merges, goes bankrupt, or becomes profitable.”
Don’t buy stories. Don’t chase rolling balls of butcher knives.
Buy great companies doing great things. And hold onto them for dear life.
We don’t mean to sound like Jack Bogle on a Monday morning, but… well, yes we do.
We’ll save our scorn for drama-filled stocks when we revisit the Beyond Meat saga in the days ahead.
Also, $180k for an electric Porsche seems steep. Lot of value out there in used 911s you can get for under $60k.
Market Rundown for Mon. September 9, 2019
S&P 500 futures are up 8.50 at writing at 2,989.
Oil is up $0.30 at $56.82.
Gold is up $5.00 at $1,520.
Bitcoin goes for $10,432.
The VIX is at 15.11, off 1.16 or 7.13%. Think that means a nice calm Monday is in store?
Have a great day, we’ll talk more tomorrow.
For the Rundown,