Hedge funds are associated with some of the wealthiest people in the world. Names such as Steve Cohen, George Soros, Paul Tudor Jones, Carl Icahn bring to mind images of wealth – both managers and investors – that are beyond the imagination of 99% of the world’s population.
According to a growing number of investors, cryptocurrencies are not only the future of money, but also attractive profitable investment assets, though highly risky and volatile. As of today, the market capitalisation for Bitcoin has increased tremendously, from around $7.16 billion in May 2016 to $27.9 billion in September 2017.
Tax policy is fascinating – really. According to the Tax Policy Center, 45.3% of the US adult population pays no income tax, despite touching most people’s lives. As discussed in this article, the rules are complex because they need to cover the many ways in which people and corporations act in the pursuit of profit and even philanthropy.
Taxation is obscure. Partnership taxation is really obscure. 70% of partnership income accrues to the top 1% of taxpayers, but over 50% of all business income is earned through partnerships (or other pass-through entities). It is fair to say its revenue impact is disproportionate to its relevance in an existential sense.
The Treasury Secretary, Steve Mnuchin, has delivered some incoherent messages about tax reform. It appears he has not yet understood that tax policy will be driven by the President working with his new Democratic friends Nancy Pelosi and Chuck Schumer. One of the tax beasts to be slain is carried interest, the pernicious mechanism by which $20bn of wealth annually is delivered to the 1% with careless regard for the suffering of the middle class. President Trump has promised to fix this. In this, he is not alone. Carried interest has been in the crosshairs for over ten years. Even the 1% broadly agree that it is without merit. But why is it still around?
Unrealistic expectations cause problems and are exposed in a multitude of situations.
Fintech companies have disrupted the digital landscape. So far, they have successfully changed how financial firms are structured and provisioned, but have not successfully established themselves as the most dominant players. How will Fintech firms shape our life and can they succeed in their quest? The collision between financial institutions and large technology companies looks very promising.