Newsworthy Archives – Page 9 of 33

May 28, 2021June 24, 2021

Opening Up

We are tip-toeing into the future. Conditions are a little spartan, a little unfamiliar. This is good; this is scary. Caution, patience, and gratitude are the watchwords.

Beware: Lots of People Ahead

I took my first flight in a year last week, just a hop up north to see family. Y’all… there are a LOT of people in airports!

Pre-pandemic Hong Kong, photo Wall St Journal

It was like when you are away from home for a long time, like a summer or when you first go to college, then you are back. It is both strange and familiar. Your primitive brain remembers. Crowds of people are back. Can’t say I really liked that. But we have 8 billion people in the world, so we must share it with each other.

If you haven’t done this in a while, never fear (as long as you are vaxxed A.F, as the kids say today). The airplane wasn’t actually that bad although that was the longest wearing a mask nonstop that I have done in a while. And airplane are always late aren’t they? A little late coming in? Early to the arrival gate, which means you sit on the tarmac. Mechanical something or other, flight crew’s not there. That is all oh-so familiar, too. If we have learned nothing from this experience, it ought to be patience.

But that six feet of space thing? People in airports seem to have thrown that out the window already. Be vaxxed or stay masked.

Masks aren’t strange any more. Photo by Vladimir Vladimirov.

April 17, 2021April 18, 2021

O is for Overhead

Overhead is a term used by people who are overhead. No one wants overhead. No one wants to be overhead. No one wants to pay for overhead. But we’re all basically overhead.

Overhead, figuratively and literally. Photo from wikipedia.

Pity the Poor, Ignoble Overhead

Overhead refers to the costs a company incurs for expenses that are not directly related to whatever is being produced. Typically, these are “fixed” costs, costs that don’t change regardless of how many hamburgers are flipped or customer calls are handled. Examples might include everything from the CEO’s salary to the desks to the fees for Internet connectivity.

Most people, when they think about paying for a product, focus on only the product itself. I should only have to pay for the sandwich. How can it cost so much to make a pill? They think of a product as only the sum of the ingredients, rather than factoring in the distribution, packaging, design, testing, communication (advertising), inventory, or any number of other costs that have to exist in order for them to have the ability to buy that thing at that time at their convenience.

Very important overhead, especially in COVID times. Thank you janitors!!! Photo from shutterstock.

April 10, 2021April 10, 2021

I is for Ireland

“Leprechaun economics” is the term Nobel-prize winning economist Paul Krugman used. With all due respect to Ireland–that greenest land of wind, stories, and music to soothe the soul–their tax law sucks bilgewater.

Leprechaun economics, picture at ginokenny.com.

The Republic of Ireland has managed, in the last fifty years, to transform itself into the world’s largest tax haven. Meaning a place that allows multinational corporations, particularly those formed and operating in the U.S., to use creative accounting to pay very little in taxes. How little? How about 0.005%?

Apple Chooses Between Single Malt or Double Irish

Apple is a company that has always thought far in advance about packaging and design–including on their financial statements. Back in 1980, about the time when they were prototyping the Macintosh, Apple opened a small office in Cork, Ireland, lured by a deal to pay no taxes for several years. Such local tax arrangements aren’t that unusual–Twitter moved into a derelict building in downtown San Francisco for the same “no tax for years” deal, while Delaware has long been known as a favorable legal and financial place for companies to incorporate.

What Apple was also able to do, over decades, was use its growing economic power to support an Irish shift into a myriad of favorable tax strategies–favorable to corporations, that is. A so-called Base Erosion and Profit Shifting (BEPS) plan allows companies to put their huge patents as giant assets on their balance sheets, in Irish subsidiaries. These patents, the stock and trade for tech companies, are amortized (charged out over time) in a convoluted way that allows the income received to be located in Ireland–with very low tax rates–even if it was earned somewhere else.