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Tesla CEO Elon Musk gestures as he arrives to visit the construction site of the future US electric car giant Tesla, on September 03, 2020 in Gruenheide near Berlin.

 

MAXIM - On October 27, the chairman of the US Senate Finance Committee, Ron Wyden, presented a plan according to which the tax on long-term capital gains should also apply to the "unrealized gains" of exchange-traded assets owned by persons who own assets worth more than $ 1 billion or have received income of $ 100 for three consecutive years mln. How much will the richest Americans pay to the US budget?

On Monday, October 25, when Tesla shares jumped, adding $ 26 billion to Elon Musk's fortune ($ 253 billion), some Democrats in Congress were working on a bill to introduce a new tax on billionaires. Early Wednesday morning, Senate Finance Committee chairman Ron Wyden unveiled a 107-page plan that the federal tax on long-term capital gains should also apply to "unrealized gains" in exchange-traded assets held by individuals holding more than $ 1 billion or more in assets. for three consecutive years, they received income of $ 100 million.

Thus, the unrealized (and therefore never taxed) capital gains of eligible billionaires are taxed again. The Wyden project is expected to take effect in 2022. To understand the scale of the loss, Forbes calculated what would have happened if the tax had already been in effect in 2020, taking as an example the 20 richest billionaires from the Forbes 400 rating, whose assets consist mainly of stocks, including Musk, Jeff Bezos, Mark Zuckerberg. , Bill Gates and Warren Buffett. In theory, they would have to pay the government $ 239 billion.

In 2020, Bezos would have suffered the most ($ 39.7 billion in debt), followed by Zuckerberg with $ 19.9 billion. Wyden's plan gives billionaires five years to pay their first year net tax. and permits this amount to be distributed over five equal tranches.

Musk's shares as of September 3 (this data was used to compile the Forbes 400 rating of 2021) have grown by $ 83 billion since the publication of the rating last year, which means that the Tesla founder would have to pay an additional $ 20 billion in taxes: for the first two years the total the amount would have been $ 29.8 billion. For comparison: according to tax returns received by ProPublica, from 2014 to 2018, Musk paid income taxes in the amount of $ 455 million.

Based on the 2021 Forbes 400 date, the top 20 billionaires would have to shell out another $ 106 billion in 2021. Note that these calculations are correct if we assume that the tax was introduced in 2020, and not in 2022, as stipulated by the bill. In just the first two years of the tax, these billionaires would have to pay $ 345 billion, or about 19% of their combined wealth, assuming they did not make large donations, which the bill also allows.

Unsurprisingly, Musk immediately condemned the new bill, posting several critical tweets on Monday. “Sooner or later, other people's money will run out and they will come for you,” he wrote on Twitter.

Still, Wyden's project seems to leave billionaires with several ways to avoid paying taxes: for example, transferring the risen shares to a charity before the tax is calculated at the end of the first year. And if only exchange-traded assets are taxed annually, hundreds of billionaires with stakes in non-public companies are left on the sidelines. More specifically, 56% of the 400 richest Americans (and 58% of the 777 American billionaires monitored by Forbes) own predominantly non-public assets.

But Wyden hadn't forgotten about them either. In contrast, these assets, which are not listed on the exchange, are taxed (with a “deferral” surcharge) on sale or on certain types of transfers or gifts. For example, the gains included in the value of these assets at the end of the first year, when the taxpayer begins to be taxed on billionaires, will be charged to that year, then interest for all these years will be added to the amount of tax to be accrued for the first year. The total amount of interest will be limited. So, according to the bill, in the year of sale, the total amount of capital gains tax, as well as all deferred interest, cannot exceed 49% of the gain.

Less wealthy billionaires will also receive benefits: they will be able to pay taxes on their shares in public companies worth up to $ 1 billion as if they were non-public assets.

One of the big beneficiaries of the deferral for non-public assets will be Michael Bloomberg, the main donor to the Democratic Party: he has a fortune of $ 59 billion and is the richest American with predominantly non-public assets thanks to his 88% stake in Bloomberg LP.

It is unclear whether cryptocurrencies will be treated as exchange-traded assets (subject to an annual tax) or as non-tradable assets that are taxed only if sold or transferred, potentially exempting billionaires like Sam Bankman-Fried from paying tax. He has earned $ 26.5 billion in several years and is already criticizing the bill on Twitter.

“If you exclude a tax on cryptocurrencies, it can be a bigger problem than an exemption for non-public assets,” says Philip Hackney, professor of tax law at the University of Pittsburgh.

According to David Gamage, a law professor at Indiana University who worked on the bill with Senator Wyden, some, but not all, cryptocurrencies will be taxed, but which ones are still unknown.

The bill, according to its supporters, does not introduce a property tax, which they believe will protect it from being declared unconstitutional: the idea is that it is an income tax applied to unrealized gains and calculated based on current exchange rates, that is, publicly traded assets are valued as if they were being sold at the end of each year.

Billionaires can evade tax by transferring their shares in limited liability companies or trusts to hide the beneficiary. “Wealthy individuals will be looking for tools to place their money in trusts that are exempt at current rates, and the government and the IRS will try to prevent this,” says Philip Hackney, professor of tax law at the University of Pittsburgh.

Wyden is trying to limit the use of trusts for tax evasion: the bill introduces a tax on existing trusts that own assets of at least $ 100 million or receive income of $ 10 million for three consecutive years, and classifies the transfer of assets by a billionaire to certain trusts as taxable sale. Charitable trusts are exempt from asset transfer tax, and special rules apply to trusts with separate beneficiaries (where the beneficiaries are both a charitable organization and an individual).

What about billionaires who paid taxes and then saw their share price plunge? Between 2020 and 2021, shares of mortgage billionaire Daniel Gilbert and casino empire owner Miriam Adelson in Rocket Companies and Las Vegas Sands fell $ 7.6 billion. Wyden's bill would offset any losses they suffered at the end of the year. on account of income for the previous three years, and therefore, they will be able to demand the return of large amounts.

Wyden's bill is controversial even among Democrats. Some Democrats are reportedly considering introducing a 3% “surcharge” tax on those earning more than $ 5 million a year instead of the billionaire tax.

Some are in favor of a previous plan, backed by President Joe Biden, to tax unrealized profits in excess of a certain amount in the event of an entrepreneur's death. Under current law, all assets held by someone at the time of death are “raised” to their current market value, which means that any unrealized profits, even if they reach tens of billions of dollars, are not subject to income tax.

“Billionaires and mega-millionaires can evade taxes in a way that wreaks havoc on the economy,” says Indiana University's Gamage. “There are problems in our tax system, and this is a good first step towards eliminating them.” (Forbes)

 


MAXIM - Tech giants Facebook, Twitter, Alphabet are due to report their third quarter 2021 financial results next week. On the eve of their shares collapsed after the securities of the social network Snap, whose advertising business "sank" in July-September due to the new privacy policy of Apple. Is it worth investing in tech players now?

What's happened

Shares of the world's largest IT companies fell sharply following the collapse of shares of the social network Snap (by 30%) on Thursday evening, October 21. The leaders of the fall were Facebook and Twitter, which sank 6% on the postmarket. Alphabet (parent of Google) shares fell 2.8%.


What does it mean

In April 2021, Apple changed its privacy policy for iOS apps: the innovations also affected the ads that Snap partners, Facebook and Twitter showed users based on data about them. Previously, the user, by downloading the application, by default gave consent to the use of their data, and it was necessary to prohibit their collection by a separate action. Now the owner of the application cannot process user data until he specifically gives his consent.

Snap shares plunged yesterday following the release of third-quarter earnings and forecast for October-December 2021. “Our ad business has been undermined by changes Apple made to advertising tracking policies for iOS users in June and July. Apple's new solution did not scale as we expected, making it difficult for our ad partners to manage and measure their ad campaigns, ”Snap co-founder Evan Spiegel said during a conference call. Snap's revenue for the third quarter of 2021 fell short of expectations - it amounted to $ 1.07 billion against the $ 1.1 billion predicted by Refinitiv analysts. In the fourth quarter, Snap expects revenue of $ 1.16-1.2 billion, but analysts predicted it at $ 1.4 billion.

Twitter, Google, Facebook also make money from advertising, which makes up a significant share of their income: Twitter - 86.3%, Google - 80.5%, and Facebook - 97.7%. Therefore, the reaction of investors was natural, says Evgeny Shatov, partner at Capital Lab. These companies are due to report July-September financial results next week. The impact of the changes in iOS for Facebook will be most noticeable in the third quarter of 2021, but should weaken in the fourth quarter, Goldman Sachs analysts wrote in a note to investors dated October 7 (Forbes has).

Why do I need to know this

Apple's innovations can completely rebuild the online advertising market, says Capital Lab's Shatov: "The situation at the moment is critical for companies where the bulk of income comes from advertising sales." The changes affected not only technology companies, but also businesses, players in the e-commerce market, The Wall Street Journal points out.

Under the new conditions, the cost of attracting a user for an advertiser may significantly increase, respectively, the demand for such advertising from customers is likely to decrease, which will certainly negatively affect the income of companies, Shatov said.

Facebook ad prices have already increased by 25% for advertisers. At the same time, small businesses that promote their products and services mainly through Facebook and Instagram, changes in Apple's privacy policy forced to reduce advertising costs, writes The Wall Street Journal, which spoke with 20 CEOs of companies in the e-commerce and advertising market.

For the investor

For investors who are willing to take on high risks, buying stocks on a fall can be an opportunity to make money if Facebook, Twitter and Google during their reporting show not only good results for the third quarter (as analysts expect), but also raise forecasts for the fourth or at least they will be left unchanged, says Shatov, partner at Capital Lab. And conservative investors, he continues, will wait for the results of the reporting: if the companies show poor results, this will help to avoid losses, and if they give a positive outlook, then you can buy shares and wait for further growth of securities.

The fall in shares by tens of percent looks strong, but this is due to the peculiarities of the pricing of fast-growing companies, says Nikita Yemelyanov, an analyst at Aton. Usually experts predict revenue growth for the next year, based on the company's growth over the past years, continues Yemelyanov: "If the company lowers its forecast by at least 1%, analysts will extrapolate this for the next years and at the moment a fast-growing share may lose 10% at once." And vice versa: if a fast-growing company raises its forecast by at least 1%, its shares may immediately rise in price by 10% or more, he added. (forbes)

 

iphone 12 and iphone 13.

MAXIM- According to a security expert who has spent years studying hacks by Israeli firm NSO, which has a turnover of $ 1 billion, the spyware for iPhone made by the monitoring company has revealed "major" issues in Apple's iMessage security.

Reports from Amnesty International and Citizen Lab, following an alleged data leak on 50,000 potential targets of NSO's spy tool Pegasus, claimed that they had both seen a so-called attack "zero clicks”exploiting numerous vulnerabilities in a fully patched iPhone 12 Pro Max running iOS 14.6 in July 2021. This notably included hacks of iMessage.

Citizen Lab researcher Bill Marczak told Forbes that in some cases Apple's iOS will automatically run data in iMessages and attachments, even when it comes from strangers, which could result in endangered users.

“This is a recipe for disaster,” he said. "Apple should consider implementing something similar to what Twitter or Facebook has for their DMs, where messages from strangers are somewhat hidden, and filtered in a separate pane by default."

For now, adds Bill Marczak, this is not a problem for the average iPhone user, as the target list acquired by the nonprofit Forbidden Stories focused primarily on people at the top. risk of government surveillance, from journalists like Financial Times editor-in-chief Roula Khalaf to relatives of murdered journalist Jamal Khashogghi. Heads of state are also said to be on the list of potential targets. NSO has been questioned several times over the past five years after its tools were seen targeting Mexican lawyers, Saudi activists and journalists around the world, though the company claims its software is used to help governments catch criminals like terrorists and pedophiles.

“But if Apple doesn't nip this problem in the bud, these kinds of zero-click iMessage attacks will inevitably proliferate among less sophisticated hackers, such as cybercriminals,” Marczak warned. He previously posted on Twitter that an Apple security mechanism called BlastDoor, designed to segment content in iMessage in case it contained malicious links or code, did not protect users from these dangerous exploits. He noted that some of these exploits used ImageIO and its JPEG and GIF image analysis capabilities. “Over a dozen high-severity bugs were reported against ImageIO in 2021,” he tweeted.

Apple, however, believes that its technology protects users well against text-based attacks. For example, the tech giant said that if a link to a website is sent to a user through iMessage, they will not reach a web page to preview the site and will only accept an image from static preview of the sender. BlastDoor will treat them as untrusted sites and any code from such sites that is launched should only run in a separate and secure part of the operating system. This should block any hacks initiated by a link to a website.

“Apple unequivocally condemns cyber attacks against journalists, human rights activists and others who seek to make the world a better place. For more than a decade, Apple has been at the forefront of innovation in security, and therefore security researchers agree that the iPhone is the safest and most secure consumer mobile device. secure market, ”said a spokesperson for the Cupertino tech giant.

“Attacks like the ones described are very sophisticated, cost millions of dollars to develop, often have a short lifespan, and are used to target specific individuals. While this means that they are not a threat to the overwhelming majority of our users, we continue to work tirelessly to defend all of our customers, and we are constantly adding new protections for their devices and data."

The next iteration of Apple's operating system should come with further enhancements designed to counter sophisticated exploits, the spokesperson added, without giving further details.

NSO, meanwhile, said reports of a leak of 50,000 targets of its spyware were "false", suggesting to the Guardian that they were based on "unsubstantiated theories that raise serious doubts about the reliability of your sources, as well as on the basis of your history ”. Some publications, including the Washington Post and The Guardian, have noted that just because a person's device is on the list of potentially targeted phones does not mean their phone has been infected with Pegasus spyware.

The company has denied that its tools were used to target members of Jamal Khashogghi's family, after reports suggested that his former wife, Hanan Elatr, and his fiancee Hatice Cengiz were targeted both before and after his death. (Jamal Khashogghi would have had a relationship with the two women at the time of his death). “As NSO has previously stated, our technology was in no way associated with the heinous murder of Jamal Khashoggi. We can confirm that our technology has not been used to eavesdrop on, monitor, track or collect information about him or his family members mentioned in your request. We have already investigated this allegation, which, once again, is made without validation ”. (Forbes)

Elon Musk.


MAXIM - Elon Musk became the third person to have a fortune of $ 200 billion on Monday, thanks to the soaring Tesla share that made him the richest person in the world.

His feat follows Amazon founder and space rival Jeff Bezos, who first hit the $ 200 billion mark in August 2020, and luxury mogul Bernard Arnault, who did so for a short time on last month. Shares of Tesla, Elon Musk's electric vehicle company, continued a four-month rise, closing up 2.2% at $ 791.36, their highest level since February this year. Elon Musk got $ 3.8 billion richer on Monday and his fortune stood at $ 203.4 billion at market close. He overtakes Jeff Bezos, whose fortune fell by $ 1 billion on Monday to $ 197.7 billion, due to a 0.6% drop in Amazon shares.

Elon Musk is even richer today than he was at Tesla's heyday in January - when he briefly became the richest mogul in the world for the first time - because he received additional awards stock options that increased its stake in Tesla; he owns about 73.5 million Tesla options worth about $ 53 billion. Elon Musk owns more than a fifth of Tesla; Forbes deducts a portion of this interest to account for the shares he pledged as collateral for loans.

Elon Musk's fortune is heavily tied to his stake in Tesla, which ended Monday with a market cap of over $ 792 billion, and in SpaceX, which was valued at $ 74 billion after a round of table in February. After promising last year that he would get rid of almost all of his personal belongings, including six mansions, he now has only one house and considers his main residence to be a rental unit of 37 square meters.

Tesla shares soared more than 720% in 2020, helping to increase Elon Musk's net worth by more than $ 125 billion in one year. After swapping places with Jeff Bezos as the richest person in the world for several days in January, Tesla shares began to fall. In April, Elon Musk was also passed by Bernard Arnault. The unusually frequent changes at the top of the billionaire rankings continued last month, when Elon Musk again became the second richest person, behind Jeff Bezos.

The pair, who run competing rocket companies - SpaceX for Elon Musk, Blue Origin for Jeff Bezos - also traded jokes about their billionaire space race. Last month, tensions led to a lawsuit by Blue Origin against the federal government to challenge a NASA $ 2.9 billion contract awarded to SpaceX.

Elon Musk did not respond to a request for comment on his net worth and rank among the world's billionaires at the time of publication. (Forbes)

Civil Rights Leader Martin Luther King waves to supporters on August 28, 1963 on the Mall in Washington DC during the "March on Washington" (AFP)

MAXIM - For the first time in its history, Agence France-Presse (AFP) is exhibiting a selection of its film years (1944-1998), which will be auctioned at We are on October 3.

“Some have been in the news of the last century and have sometimes become cult. Others are real photographic surprises and testify to the real views of authors. All mark a moment in history "explains Marielle Eudes, Director of Photography at AFP. These photos, which will be auctioned on October 3 at We are, are all taken from the agency’s silver background, which contains more than six million photos, including 350,000 on glass plates. It is easy to imagine the titanic work that must be required in the management and operation of this gold mine, between historical snapshots and snapshots of a bygone era. 

“Not all photographs are meant to be digitized, if only for cost considerations. And yet, this background constitutes a breeding ground of great wealth: some photographs are unknown to the general public, others also to us. So many reasons that made us decide to shed light on this part of the agency’s history ”. How do you recognize an iconic photo? For Samantha McCoy, Director of the Magnum Gallery, it is due to the ability of photography "to instinctively take hold of our emotions. Like a perfume transporting us on the spot to a precise place or moment, a photograph can take us within ourselves or outside of us: making us travel in time, in space, towards an elsewhere, a memory or a vivid feeling ”.

Louis Armstrong performs in his dressing room for a little boy before a performance in a New York jazz cabaret in 1947 @ AFPR / Eric Schwab.

To carry out this large-scale project, Marielle Eudes chooses to delineate its outlines: the selection will relate to the silver films made between 1944, the founding date of the Agency under the name AFP, and 1998, date on which all the photographers are equipped with digital boxes. It is Christophe Callais, journalist and former editor-in-chief of Magnum Photos, who sifts through the photos, year after year, to extract a first selection, then refined under the supervision of Marielle Eudes and Stéphane Arnaud, head of photo center and deputy editor of AFP. Of the 800 photos discovered by the team, 187 are retained. Among them are emblematic moments in the news with the Liberation of Paris, May 68 or Nelson Mandela with a raised fist after his release in 1990, celebrities such as this surrealist portrait of Dali at the Vincennes zoo, or scenes from daily life on the banks of the Seine.

Salvador Dali paints a rhinoceros with the famous painting by Vermeer "La Dentellière", at the Zoo of Vincennes, April 30, 1955. (AFP)

Some images have been around the world, such as that of the death of Ernesto Che Guevara taken by Marc Hutten, AFP text reporter and photography enthusiast. Known for his photographs on the liberation of the Nazi camps in 1945, Eric Schwab reveals here another part of his work. Settled in New York after the Liberation, the man travels the city, film in hand, to capture his indescribable energy. Years during which, the photoraghe recounts "with great delicacy New York life, strolling on Broadway, taking us in jazz clubs to meet Louis Armstrong, Cab Calloway or Nat King Cole, or on the Coney Island beach. (…) The work of the Agency's archivists has made it possible to bring to light a real author ”, summarizes Eric Karsenty, editor-in-chief of the photo magazine Fisheye in the special issue“ Agence France-Presse, the silver years 1944 -1998 ”. To admire his photographs, four partial exhibition locations have been selected: the Fisheye Gallery, We are, Galerie 75 Faubourg and Maison Villeroy. A journey through the capital like a treasure hunt from years gone. (forbes)