| |  | TOGETHER WITH |  | | | Good morning.
Today is the 35th anniversary of the television debut of The Simpsons. America's most famous cartoon family premiered as an animated segment on the Fox sketch comedy program The Tracey Ullman Show before going on to headline their own primetime half-hour. The Simpsons is famous for inadvertently predicting the future, including the Trump presidency, the censorship of Michelangelo's David, smartwatches, the discovery of the Higgs boson, and Disney buying 20th Century Fox.
Owners of Meta's battered stock can therefore look with hope to episode 17 of The Simpsons’ 11th season, which depicts avatar-powered hologram mail, and episode two of season 28, which depicts virtual-reality dining. | | | • | | The Supreme Court batted away a challenge by states to overturn the SALT cap. | | • | | A program to encourage European companies to list in China has lured zero suitors. | | • | | Gold and bitcoin tell parallel stories of investor skepticism. | | | | |  | Taxes | New York’s Challenge to the SALT Cap has Been Rejected for Good | | This Monday, the Supreme Court rubbed SALT into the annual tax return wound of every New York and New Jersey resident who makes a decent income.
The highest court in the land rejected an appeal by four states to overturn a cap on state and local tax deductions (SALT). Critics say the rule makes life for some blue-state residents more expensive than a ticket to an exclusive Democratic Party fundraiser. | Got the Blues | | Back in 2017, Republicans passed tax reforms that, among other things, included a $10,000 cap on the amount of state and local taxes people can deduct from their federal income tax, with a 2025 expiration date. The people hit the hardest were high earners in states with high taxes — also known as rich people in blue states.
Four states — New York, New Jersey, Maryland, and Connecticut — sued to overturn the cap, but were rejected in October by the Second Circuit Court of Appeals, which didn’t buy the argument that the cap unconstitutionally infringes state sovereignty. The Supreme Court didn’t even give them the dignity of a reason for the rejection of their appeal, which was quietly tucked away in order papers on Monday. That means well-heeled blue state residents can expect headaches for at least three more tax seasons: | • | | New York estimates its taxpayers will end up paying $121 billion in extra federal taxes from 2018 to 2025 because of the SALT cap. | | • | | According to WalletHub, when you measure taxes on individual income, property, and sales, as well as the excise tax as a share of personal income, New Yorkers have the highest state tax burden at 12.75%. New Jersey is sixth, with 10.1%, and Connecticut seventh with 10%. Alaska has the lowest tax burden (5%), while a list of the top ten tax-light states also includes Live Free or Die New Hampshire (6.4%) and Florida (6.4%). | | | | A Bit Rich: While some moderate Democrats have pushed to raise the cap to $80,000, experts say changing it wouldn’t help most of their constituents. “Only about 9% of households would benefit from a repeal of the Tax Cuts and Jobs Act’s (TCJA) $10,000 cap on the state and local property tax (SALT) deduction,” wrote Tax Policy Center analyst Howard Gleckman in a research note. “More than 96% of the tax cut would go to the highest-income 20% of households.” | | | | | | Stock Markets | European Companies Say ‘No Thanks’ to China’s Offer to List There |  | | China has ramped up efforts to convince European multinationals to list their shares in Shanghai, but has run into just a tiny little problem: nobody’s interested.
Among the many sound reasons for turning the cold shoulder, one stands out: No European CEO wants to risk trading in their navy blue Armani suit for an orange prison jumpsuit. Seems fair to us. | Heralded With a Sad Trombone | | In 2019, the Shanghai and London stock exchanges launched a much-vaunted program to make Chinese-listed shares available to investors in Britain, while offering British-listed shares to investors in China. Then, like a tragic birthday party at Chuck E. Cheese, hardly anyone showed up. Huatai Securities, a state brokerage, was the first to list in London, followed by three more state-owned firms, cumulatively raising $5.8 billion through the issuance of global depositary receipts. Yet not a single London-listed firm listed in China, and there have been no new issuances via the program since 2020. Ouch.
Despite absolutely zero fanfare, the program was expanded to Germany, Switzerland, and Shenzhen earlier this year. Chinese officials eased the financial reporting and disclosure obligations of foreign firms to try and lure in some listings, but there remains the one giant catch: | • | | Under Chinese law, the CEOs and executives of publicly listed companies can be held criminally liable for their firms’ activities. China’s draconian legal system was ranked 98th out of 139 countries by the World Justice Project last year with a reported conviction rate of 99.965% in 2019 (translation: not good for those seeking justice). China did not address this concern in its latest rule changes. | | • | | HSBC, UBS, Siemens, and Volkswagen — all of which have a significant presence in China — were approached about listing under the program, and all opted for thanks, but no thanks, according to sources who spoke to The Wall Street Journal. | | | | One Way Ticket: While a European firm has yet to use the program to list global depositary receipts in China, four more Chinese companies, among them machinery firm Sany Heavy, are planning listings on Zurich’s SIX Swiss Exchange now that the program has opened up to additional markets. | | | | | | SPONSORED BY YIELDSTREET | Time To Tweak The Portfolio Recipe | - Mix 2 parts sky-high equity valuations with 4 parts inflation
- Add a splash of geopolitical turmoil
What’ve you got? For traditional assets, that’s a recipe for a hangover. But it could also prove a delicious combination for investors thinking outside the box. Enter alternative investments and their wealth-creating potential. Normally the playground of the 1%, Yieldstreet has opened the door to these alternative investments like fine art, real estate, and venture capital: | | | | | | | | Global Economics | With Global Growth Slowing, Investors Fall Back on Familiar Strategies | | War in Ukraine. COVID lockdowns in China. Soaring inflation. These omnipresent realities are beginning to put a dent in the collective enthusiasm of leading economists.
In turn, investors are banking on familiar strategies for navigating times of turmoil: leaning into safe assets, while avoiding riskier bets. Gold and bitcoin tell the story. | New School vs Gold School | | Blaming Russia’s invasion of Ukraine, on Monday the World Bank slashed its global growth forecast for the remainder of the year from 4.1% to 3.2%. Meanwhile, in China, even good news is tempered by skepticism. Barclays and JPMorgan both reduced their growth forecasts for the nation this year, even after China’s National Bureau of Statistics announced better than expected GDP figures in the first quarter on Monday (up 4.8% year-over-year).
Amid the gloomy economic projections — and the consequently slipping US stock market — investors are pushing gold (the safe-haven option, bar none, for jitter-bitten investors) and bitcoin (still a somewhat risky new asset) to respective peaks and valleys: | • | | The price of gold inched up on Monday by 0.8% to $1,989 a troy ounce, its highest point in five weeks. As usual, gold's increase indicates a strong hedge against inflation, though it remains a slight surprise given the dollar’s current strength and 10-year US Treasury yields shooting to their highest levels in three years — two factors that typically depress gold’s value. | | • | | Bitcoin, meanwhile, slumped to its lowest point in over a month. The leading cryptocurrency fell more than 4% to around $38,500 on Monday, while the global crypto market dropped roughly in proportion to that number, according to CoinGecko. | | | | Golden Year: With the blue-chip S&P 500 down around 1.5% in the past month, and roughly 8% year-to-date, it's unsurprising that investors are turning to safe assets. And while bitcoin bulls have long touted the digital coin as the new gold of the internet age, not all mainstream investors are treating it as such. | | | | | | Extra Upside | • | | Google Wallet might be making a comeback. | | • | | Want to read the top-secret, leaked Facebook documents news reports kept citing last year? Gizmodo is publishing some of them. | | | | | | | | |  | Just For Fun | | | | | Written by Sean Craig and Brian Boyle. | | No longer want to receive these emails? Unsubscribe here. Copyright © 2022 The Daily Upside, LLC., All rights reserved. 1230 York Avenue, Box 154, New York, NY 10065 | | | | |
