Time to talk about taxes
Don’t run! I promise, this will be neither a) a godawful political screed on how The Fedral Gubmit should or should not be dealing with your funds nor b) a dust-dry finance tract riddled with the kind of economic obscurities that would make Andy Dufresne doze off.
Instead, courtesy of Pew Charitable Trusts, here’s an easy-to-read breakdown of how and how much every state in the Union bring in their taxes.
8 flavors of taxes
Per Pew, state taxes come in eight conveniently color-coded flavors:
Personal income, the “ouch” that comes with the paycheck, the money taken out of what individual citizens earn.
Corporate income, the literal cost of doing business.
General sales, a little bit of extra money charged for (almost) everything. When by some weird, wee little number the price tag matcheth not the receipt, this is your guy.
Licenses, the little extra fee you pay for your official license to do anything worth licensing. Hunting, marriage, surgery: if you want the government to recognize that you can do it, pony up.
Other, where the tax code honors what makes your state… what’s a nice word? Special. What makes it special. Nevada skims about 8% of its annual revenue off casino and lottery winnings. That kind of thing.
Property, tax paid for the privilege of actually owning a thing, rather than borrowing it, renting it, or just generally hanging out with, on or by it.
Selective sales, tax applied to particular products as opposed to just everything. Rates are usually higher than general sales, and they’re frequently applied to things your state would rather you use less of. Alcohol, gasoline and tobacco are the big hitters.
Severance, the tax you pay for pulling nonrenewable resources out of a state so you can sell them, because then they’re not there anymore.
Matt’s Glossary of People Taking Your Money
What’s the value of Matt’s Glossary of People Taking Your Money, you ask?
The value is that understanding how the tax structure works, and above all what places do it in which ways, is how you keep as much of your coin as possible.
Try it like this
Imagine, if you will, the life of a prospector in North Dakota. I assume you have a mule, some overalls, one of those helmets with the little light on it (I have never been to North Dakota).
Like any self-respecting member of your profession, your dream is a comfy digging operation where you can cook your sourdough and play your harmonica in profitable peace.
Before you pound in your tent stakes, it might just be worth your time to know that your home state makes 41.8% of its tax revenue in severance tax, which is to say, taxes levied on your business model. Hop the border to Montana? 6.3%. Oh, and if you can find something to dig up in Iowa, guess what? No severance tax. At all.
That’s how it works everywhere
AG’s beloved home of Texas lives and dies by general sales tax: 62% of state tax revenue. There is no, repeat no, personal income tax at the state level. Instead, we charge 6% extra on everything. That makes Texas utterly rad if you roll with comparatively high income and comparatively few purchases.
By contrast, Oregon gets 70% of its state income from personal income tax.
But there’s no sales tax. If your lifestyle, business plan or both involve a whole lot of buying and selling, going Evergreen rather than Lone Star, much as I hate to say it, could be what it takes to bring your business to life.
That’s why this matters
“Taxes” aren’t one thing. They’re a field, a complex interaction of policies, and understanding how – and where – they work is make-or-break knowledge for any serious entrepreneur.
Dig in the right spot.
Blockchain has a competitor that could already obsolete the tech
(TECH NEWS) Just as people are learning what the word “blockchain” means, technology is already advancing beyond this groundbreaking innovation.
Blockchain’s new competitor may one day render the popular database service obsolete. Hashgraph pitches itself as a “superior consensus mechanism/data structure alternative to blockchain,” featuring a decentralized platform for micropayments, live collaboration apps, distributed MMOs, auctions, and distributed capital markets.
The distributed ledger technology system notes it’s faster, fairer, and more secure than blockchain. However, Hashgraph has very diplomatically stated, “The pitching of Hashgraph against Blockchain is a sensationalist angle that we do not endorse.”
They go on to say, “We consider Blockchain to be like a capable older brother who graciously paved the way by bringing the power of Distributed Ledger Technology to the light of day, for which we are very grateful.”
Very Miss America of them. Unlike Bitcoin, Hashgraph doesn’t need massive amounts of computation or energy consumption. This is in part due to how the system handles transactions, particularly mining.
Bitcoin mining is the process of adding records of transactions to Bitcoin’s public ledger. These records are a blockchain, which serves as a confirmation of past transactions. With standard bitcoin mining, each transaction is put into a container, forming a long single chain.
If two miners happen to make two blocks at the same time, one will be discarded eventually, especially if one arrives too quickly. Instead, Hashgraph uses every container, and any member can create transactions at any point without threat of deletion.
Currently, Bitcoin uses proof-of-work (POW), requiring costly custom hardware. PoW artificially slows down the mining process, which is why miners need special hardware to gain anything close to efficiency. However, Hashgraph offers faster transactions, too.
Right now, Bitcoin on standard blockchain are limited to seven transactions per second, but Hashgraph could be up to 50,000 times faster with 250,000 transactions per second (pre-sharding). The transactions would only be limited by bandwidth availability.
Further, Hashgraph brings fairness into play with consensus time stamping, meaning no one can alter the order in which transactions are processed. Basically, there’s no line cutting or fast passes like in blockchain, where miners can choose what order transactions occur in a block, even delaying or stopping future blocks.
Unlike blockchain, Hashgraph uses asynchronous Byzantine fault tolerance to achieve consensus within the community using virtual voting. Members cannot change the consensus once reached, nor can they prevent any community from reaching a consensus.
Plus, Hashgraph uses bank-grade consensus algorithms for added security, and is resilient to DDoS, Sybil, firewall, and virus attacks, as well as network partitions.
The amount of storage is reduced as well by only keeping the effects of the transaction, shrinking the amount of storage from its current 60GB for bitcoin to 1GB. So what does that mean? Your smartphone could act as a node.
Yes, you can start geeking out now.
At this time, Hashgraph isn’t available on public networks or ledgers, so no associated cryptocurrency is currently available. However, you can apply for an an enterprise or commercial license use on a private network by contacting Swirlds, the company that handles Hashgraphs licensing.
Like it or not, Millennials prefer Bitcoin over Stocks
(FINANCE NEWS) A new survey shows that the investment pendulum has swung to favor blockchain backed cryptocurrency over stocks when it comes to millennials.
Informed or not, Millennials prefer bitcoin over stocks. Could it be because “bitcoin” sounds cool and futuristic while “stock” sounds super boring? Studies haven’t officially evaluated my hypothesis, but let’s go with a maybe for now.
Venture capital firm Blockchain Capital’s survey of 2,000 people found that around 30 percent of the participants in the 18-34 age range would rather own $1000 of Bitcoin than $1000 of government stocks or bonds.
Additionally, of those surveyed, 42 percent of millennials were at least marginally familiar with bitcoin, while only 15 percent over age 65 knew of the concept.
On Wednesday bitcoin rose more than six percent to as high as $7,545, pushing the value of the cryptocurrency market over $200 billion for the first time ever. This time last year, bitcoin was worth around $700.
In the past year, cyrptocurrency has risen 600 percent. This is compared to measly gains of 15 percent for the S&P 500 Index. Despite the rise in value, only 2 percent of Americans currently own or have ever owned bitcoin according to Blockchain Capital’s survey.
However, as millennials become more involved in the investment force, this number is sure to increase. If U.S. regulators allow bitcoin ETFs, it may be even easier for new bitcoin buyers to enter the market.
According to Google Trends, more people are searching online for how to buy bitcoin that gold. Can you dive Scrooge McDuck style into a ludicrous pile of bitcoins? Well, no. But you also can’t have the Dothraki give you a melted bitcoin crown, so there’s that safety factor working in bitcoin’s favor.
What else is so appealing about bitcoin? Unlike traditional banks, the bitcoin network isn’t run by a centralized agency and has no physical backing. Instead, it’s run by a network of computers worldwide digitally keeping track of all transactions by storing records in a blockchain.
Since anyone can make an anonymous account, bitcoin gained notoriety a preferred method for drug dealers and ransom payment aficionados. However, the cryptocurrency is also accepted by many major businesses, including Overstock.com and eBay, for legal transactions.
Since there are no transaction or currency conversion fees, people in countries with high inflation can use bitcoin to avoid losing money. Plus, bitcoin makes international money transfers significantly faster than traditional methods.
While bitcoin certainly has proven fruitful for shady transactions, the rising popularity of cryptocurrency for legitimate uses indicates a market shift.
Venezuela cash crunch means workers won’t see money for months
(FINANCE NEWS) Venezuela is currently in a cash crunch due to a weakening oil market which means that Venezuelans won’t see pay for at least 5 months.
If you ever ran out of money as a broke 20-something, you know how nervewracking it can be to go without cash. Now, imagine you ran a country and ran out of money. Sweating yet?
Be glad you’re not Venezuela, who is extremely cash poor at the moment. According to coverage from Bloomberg, “more than $1.2 billion of the company’s debt is coming due in the next few days, and investors are showing less confidence that funds will be transferred.”
The country is already two weeks late to pay off several other bonds. Additionally, cargo ships full of crude oil have idled for months because Venezuela can’t pay for their supply of oil.
The biggest culprit for the cash shortage is the shrinking market for crude oil. PDVSA controls one of the large crude supplies in the world, and it’s been a lucrative export for the country. However, in three years, the price of oil has dropped by 50 percent.
The biggest demand for crude used to come from America, who would pay cash for the barrels; however, shipments are down 35 percent since August.
Part of that demand shortage is due to political sanctions, imposed on the country by the United States. In response to Maduro’s aggressive political maneuvering, which sought to arrest opposition leaders, “rewrite the constitution and strip power from Congress,” President Trump punished this behavior through sanctions on imports from Venezuela.
Because oil was such a lucrative export, PDVSA was targeted heavily by the sanctions. Oil importers don’t want to run afoul of these sanctions by buying crude from the country. That problem will get even worse if the sanctions increase, which Bloomberg predicts is likely to happen within the year.
There is a risk that PDVSA could default on its debt, which could have a huge impact on the oil economy. According to Bloomberg, if oil could be seized as an asset to cover for debts, oil traders will expect a significant discount to cover for that risk. That discount will sink overall oil revenue. This same problem came up when Ecuador, another large exporter of oil, defaulted on its debt in 2008.
New stats behind mobile addiction and how people are coping
Our five faves for Friday – almost Thanksgiving edition
Class action lawsuit claims Tesla plant is a hotbed of racism
Harvard digs into how several women broke the glass ceiling
How to revamp an overly long job hunt
Red Ventures acquires Bankrate, layoffs commence
All I want for Christmas is some Nuheara ear buds
9 ways to be more LGBTQIA+ inclusive at work
Wall Street wants to formally jump into Bitcoin waters
LuLaRoe in $1B lawsuit for shady business model
Amy’s Ice Cream founder on Austin’s business risks and rewards #WhyAustin
Turns out a lot of people are in between introverted and extroverted
P. Terry’s founder on the booming economy in Austin #WhyAustin
Ladies and gentlemen, the U.S. National Anthem
Indeed President, Chris Hyams tells us #WhyAustin [video]
News neatly in your inbox
Join thousands of AG fans and SUBSCRIBE to get business and tech news updates, breaking stories, and MORE!
Thank you for subscribing.
Oh boy... Something went wrong.
Business News3 days ago
Court requires Glassdoor reveal identities of anonymous users
Tech News4 days ago
NASA, Uber team up to make flying cars a reality within 36 months
Business Finance4 days ago
Blockchain has a competitor that could already obsolete the tech
Opinion Editorials3 days ago
Do literally anything with your money besides buy an iPhone X
Business News2 days ago
Feds to release new sexual harassment guidelines
Tech News2 days ago
Turn your FAQ page into a chatbot without knowing how to code
Tech News4 days ago
Mini-series inspires mental health app for veterans
Tech News3 days ago
Ex-Facebook President, Sean Parker says they knew they were creating addictions