Wednesday, February 24, 2021

The Law That Made Everybody’s Tax Info Public

 After the Crash of ’29, tycoons like J. P. Morgan, Jr. had more than enough tax write-offs to reduce their income tax to zero. As this old WSJ item reminds us, the resulting public outrage led Congress to take bipartisan action:

Under the Revenue Act of 1934, anyone who filed a federal tax return would also complete another — pink — form, with his or her name, address, income, deductions and total taxes paid. Everything on the pink slips was public information, available to reporters, nosy neighbors or former spouses alike.

 With the pink slips, the theory went, upper-income toffs would be shamed into paying something. But ordinary taxpayers also would have their earnings and tax payments exposed to public view. What would the neighbors think? What if they looked affluent enough to attract kidnappers? (With the kidnapping of the Lindbergh baby still a fresh memory, the latter worry was real.) 

A Pittsburgh glass heir named Raymond Pitcairn led the effort to repeal pink slips. Using know-how gained while lobbying for the repeal of Prohibition, he quickly won the day. The “pink slip” law was repealed less than a year after it passed.

The Supreme Court recently ordered the release of the income tax records of a wealthy serial nontaxpayer. But these days, living rich and tax free is a feat perhaps more admired than condemned.

Friday, February 12, 2021

Christo’s Estate Sale

Together with his late wife, Jeanne Claude, the artist known as Christo liked to wrap extraordinarily large objects. Christo died last year, but a posthumous work, L'Arc de Triomphe, Wrapped, may appear this fall. 

Meanwhile, Sotheby’s is auctioning off the couple’s arty possessions, including this screenprint they acquired from Damian Hirst. 

You can bid on the print, All You Need is Love, through February 18 online, but be prepared to offer more than 24,000 EUR.

Happy Valentine’s Day!

Thursday, February 04, 2021

More Game Stop winners

 The Financial Times reports that the biggest winners in the Game Stop frenzy may have been the market makers, as trading volume reached record levels.  Trading in options has exploded to record levels as well.

I've never been a day trader, I've bought many stocks but I've never sold one.

So far, so good. 

Tuesday, February 02, 2021

A taint on a trust strategy?

 According to an account posted at TaxProfBlog, Jeffrey Epstein made most of his fortune simply be getting billionaires to execute GRATs to save estate and gift taxes.

I am surprised.


Trading as a Team Sport



The new sport of trading stocks has evolved much faster than expected. A legion of bored amateurs, some armed with government stimulus checks, has driven Gamestop and other stocks shorted by hedge funds to ridiculous highs. Trading, the novices have discovered, can be fun. When you get together and make it a team sport, you can batter hedge funds so badly they need financial transfusions.

Pundits are alarmed. If a financial advisor can ignite a flash mob to shake up Wall Street as easily as former president Trump inspired a crowd to storm the Capitol, who or what is safe? (Hey, are they attacking silver? Could they go after Bitcoin?)

History tells us that participants in speculative binges get their comeuppance. This time it may take a while. According to this Axios bulletin, the short sellers have a deep bench. “[B]ig bets are coming in from hedge funds and institutional investors, meaning that the short squeeze has not even begun."

Wednesday, January 27, 2021

Tulip mania returns

 This time it's GameStop.

When short interest goes above 100% of the shares in the hands of the public, trouble is brewing.