Is taxing unrealized gains a good idea?
October 27, 2021 [View Online]( | [Sign Up]( [Morning Brew]( TOGETHER WITH [SimpliSafe]( Good morning. Thereâs been a lot going on, so we want to make sure you didnât miss our giveaway: Refer 5 friends to the Brew this week and youâll receive a limited edition pair of Morning Brew headphonesâperfect for blasting âEasy on Meâ on repeat. And there's a bonus: If you refer 5 people, youâll be entered into a drawing to win a 5-night stay at any Hilton Hotel & Resort in the world. Would be a pretty epic way to restart your travel life if youâve been stuck in this country since last March. [Share to win]( âNeal Freyman, Jamie Wilde, Max Knoblauch MARKETS Nasdaq 15,235.72 +0.06% S&P 4,574.79 +0.18% Dow 35,756.88 +0.04% 10-Year 1.610% -2.6 bps Bitcoin $61,990.62 -1.45% Facebook $315.81 -3.92% *Stock data as of market close, cryptocurrency data as of 6:00pm ET. [Here's what these numbers mean](. - Markets: The Dow and S&P [rose to intraday records](, but Facebook proved to be a drag after warning of ad business challenges in its earnings report Monday. Overall though, so far, (mostly) so good this earnings season.
- Covid: Pfizerâs low-dose vaccine for kids passed a [big test]( after an FDA panel recommended it for use in kids ages 5â11. Now, as is par for the course, the FDA must decide whether to follow the panelâs recommendation (it typically does). TAX [Tax Plan Goes After the Megayacht Crowd](
[Warren Buffett, Jeff Bezos, and Elon Musk]( Photo Illustration: Mick McDougall; Photo: Anadolu Agency, Pool, Spencer Platt/Getty Images We mentioned yesterday that Elon Muskâs fortune grew to nearly $290 billion thanks to Teslaâs stock surge. Some Democrats have floated a â[billionaireâs tax](â to make Musk and his Perrier-drinking peers send a lot more of that wealth to the government. The proposal, spearheaded by the Senate Finance Committee chair, Ron Wyden, is an attempt to raise billions in revenue to offset the costs of Democratsâ ~$1.75 trillion spending bill. Itâs...extremely unusual The tax would likely target a smaller group of individuals than any other tax in American historyâthose with $1 billion in assets, or who earn at least $100 million in income for three consecutive years. It could apply to just [700 taxpayers](. And what would they be taxed on? Unrealized capital gains. Hereâs what that means: - Currently, investments like stocks or real estate are taxed only when they are sold for a profit.
- Under the âbillionaireâs tax,â youâd be taxed on your investment gains even if you havenât sold them yet. It would be like taking a stack of chips from your craps winnings before you cashed them in. The rationale: The existing tax system is set up in such a way that the ultrawealthy can dramatically lower their tax burden by, for example, getting compensated in stock options rather than a salary like the rest of us. This plan would make that stock taxable. Plus, it would raise a truly ridiculous amount of money. The richest 169 Americans are sitting on roughly $516 billion in unrealized gains. Elon Musk himself would have to pay [up to $50 billion]( over the first five years the tax gets implemented, according to one analysis. Many experts are calling it unworkable Or worse. NYU finance professor Aswath Damodaran [wrote]( that the proposal is âperhaps the worst thought-through and most ineffective attempt ever at rewriting tax code.â Questions like, âWhat do you do when an investment goes down?â âHow would they come up with the money without selling other assets?â and, âIs this even constitutional?â are not easily answered. Big picture: While some Democrats support the plan, others think itâll be a logistical nightmare. Still, theyâll need to agree on some way to raise more revenue in order to push their spending bill forward before the week is over. One of those strategies is a [15% minimum tax]( on large corporationsâ profits, which three senators proposed yesterday.âNF Â Â Â mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew%21&body=Tax%20Plan%20Goes%20After%20the%20Megayacht%20Crowd%3A%20https%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fstories%2F2021%2F10%2F26%2Fundefined%0A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%20%E2%80%94%20Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley%2C%20daily.%0Ahttps%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fr%2F%3Fkid%3D4904f90a%26utm_source%3Demail_share%0A EDUCATION [Flip Cup Could Soon Become a Lost Art]( More than 500,000 fewer students enrolled in college in 2020 compared to 2019, about a 3% drop, and an additional half-million are expected to have [torn up]( their applications this year, according to preliminary data. That would be the biggest two-year enrollment decline in over 50 years, according to the National Student Clearinghouse Research Center. It's not the Harvards of the world that are hurting for students: - 10% fewer students enrolled in community collegesâwhich have more low-income students and students of color than four-year schoolsâin 2020 vs. 2019, and community college enrollment is projected to have dropped another 5.6% this fall.
- That bucks the typical trend: Normally when the economy is doing poorly, all enrollment, but especially community college enrollment, rises as people skip out on the job market to level up their education. Zoom out: Undergraduate and graduate enrollment has been sliding since 2012, but fell off a cliff when the pandemic kicked everyone off campus last year. Fewer students enrolling now = fewer grads seeking higher-paying jobs later.âJW Â Â Â mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew%21&body=Flip%20Cup%20Could%20Soon%20Become%20a%20Lost%20Art%3A%20https%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fstories%2F2021%2F10%2F26%2Fcollege-enrollment-could-continue-to-plummet-this-fall%0A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%20%E2%80%94%20Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley%2C%20daily.%0Ahttps%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fr%2F%3Fkid%3D4904f90a%26utm_source%3Demail_share%0A VENTURE CAPITAL [Putting the Fun Back in Fund](
[Diving into a money pit]( Giphy Despite every venture capitalist having âadventure capitalistâ in their social bios, VC firms are notoriously staid institutions. Thatâs why Sequoia Capital, one of the biggest and oldest VC firms, is restructuring as just...a fundâhold the VC. The specifics: Sequoia is [rolling up]( its US and European investments into one big Sequoia Fund, fed by individually managed sub-funds (venture, seed, etc.). In addition, Sequoia wants to become a âregistered investment advisorâ (RIA), which will give it more [wiggle room]( to invest in cryptocurrency and public stocksâassets that have been off-limits to traditional venture capital firms. - Andreessen Horowitz made the same switch from VC â RIA two years ago, but itâs overall a rare move that only financeâs biggest players can pull off. Why? In a blog post, Sequoia Partner Roelof Botha called the VC model, which operates on short timelines and typically returns money back to investors within 10 years, âoutdatedâ and âthe business equivalent of floppy disks.â If Sequoia has a good thing going with a certain startup, it wants to hold on and enjoy the ride.âJW Â Â Â mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew%21&body=Putting%20the%20Fun%20Back%20in%20Fund%3A%20https%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fstories%2F2021%2F10%2F26%2Fsequoia-capital-will-no-longer-be-a-venture-capital-firm%0A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%20%E2%80%94%20Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley%2C%20daily.%0Ahttps%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fr%2F%3Fkid%3D4904f90a%26utm_source%3Demail_share%0A TOGETHER WITH SIMPLISAFE [For Every Bump in the Night](#)
[SimpliSafe]( Youâre falling asleep, until suddenly you hear a suspicious noise, and now youâve gotta lie there with your ears perked wondering if youâve heard an intruder...or your cat. But if you have [SimpliSafe](, youâve got sensors and cameras to do the work detecting break-ins, fires, flooding, and more, so you can rest easy. Literally. SimpliSafeâs comprehensive security system can be installed in 30 minutes to blanket every room, window, and door. Dealing with a package poacher? SimpliSafeâs new Wireless Outdoor Security Cameraâs ultra-wide 140° field of view, 8x zoom, and 1080p HD resolution gets you a closer look at lurkinâ cars and scoundrels. And if you donât love SimpliSafe after 60 daysâbecause you prefer not feeling like an all-seeing wizardâyou can return it for a full refund. [Get 40% off your system, plus a free HD SimpliCam camera when you order here](. GRAB BAG [Key Performance Indicators](
[Still from 'Dune']( Dune Stat: A stunning 50% of all of Duneâs domestic box office sales last weekend came from [premium formats](, including IMAX, Dolby, and 4DX. IMAX itself accounted for 22.5% of all market share. Whatever happened, it workedâa Dune sequel was confirmed yesterday. Quote: âThank God for Ted Sarandos and Netflix.â In a new standup show posted to his Instagram, Dave Chappelle [praised]( the streaming company and its co-CEO for sticking with him in the face of backlash. Chappelle said virtually all other platforms and film festivals have withdrawn their invitations to air his documentary made in summer 2020, Untitled. Read: What is Scenius and are we living through one now? ([Not Boring]() Â Â Â mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew%21&body=Key%20Performance%20Indicators%3A%20https%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fstories%2F2021%2F10%2F26%2Fkey-performance-indicators-october-27%0A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%20%E2%80%94%20Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley%2C%20daily.%0Ahttps%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fr%2F%3Fkid%3D4904f90a%26utm_source%3Demail_share%0A REAL ESTATE [There's No Print Like Home](
[Rendering of a suburban street lined with 3D-printed homes.]( Icon/Lennar The home of the future might look a lot like toothpaste. 100 3D-printed homes are set to be squeezed out of a nozzle in the Austin area in early 2022, forming the [largest 3D-printed neighborhood]( in the US. The development, a partnership between the home construction and real estate company Lennar and 3D printing company Icon, will be a test for the technology. If the neighborhood attracts residents, it could suggest that 3D printing is a viable solution to the home construction industryâs labor shortage and supply chain issues (so long as they donât run out of cyan). How a goop becomes a home: Iconâs 15-and-a-half-foot-tall printers squeeze out layers of concrete like soft serve ice cream. In a weekâs time, they can print the exterior and interior walls of a one-story, 2,000-square foot home. Donât expect a big discount for buyers, though. According to Lennar, the 3D-printed homes will be priced similarly to other homes in the Austin areaâa city recently [described as]( the âcapital of homes selling at super premiums.â Zoom out: Supporters of 3D-printed homes hope the technologyâs cheaper building methods and more environmentally friendly assembly can offer solutions to the housing crisis and traditional constructionâs carbon footprint.âMK Â Â Â mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew%21&body=There%27s%20No%20Print%20Like%20Home%3A%20https%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fstories%2F2021%2F10%2F26%2Fa-neighborhood-of-100-3d-printed-homes-is-coming-to-austin-in-2022%0A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%20%E2%80%94%20Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley%2C%20daily.%0Ahttps%3A%2F%2Fwww.morningbrew.com%2Fdaily%2Fr%2F%3Fkid%3D4904f90a%26utm_source%3Demail_share%0A WHAT ELSE IS BREWING - [Robinhood]( shares tanked more than 8% after hours when it badly whiffed on revenue targets for the latest quarter. People arenât trading crypto as much as they used to.
- [Alphabet](, the parent of Google, nearly doubled its profit from the previous quarter and posted its largest revenue increase in 14 years on the back of a strong digital ad environment.
- [Microsoft]( also had a great quarter.
- [YouTube, TikTok, and Snap]( representatives testified before Congress about steps theyâre taking to keep kids safe online.
- [Winter Olympics]( countdown: 100 days. BREW'S BETS Try crypto with confidence. On [eToro](, youâll be supported in your forays into the spaceâtheyâve got market guides, a weekly newsletter, and real-time analysis tools. You can even experiment with a virtual portfolio and copy top tradersâ moves. [Try eToro here](.*Â A magical sleep treat. Magical because Lunya has designed comfy sets out of their naturally thermoregulating, Washable Silkâyes, washableâand these 'fits turn sleeping and lounging into opulent affairs. The treat? [$20 off your first order with code FOR-MORNINGBREW](.* Itâs time to build: This week, Founderâs Journal kicked off another miniseries, â[How To Start Building](,â featuring episodes all about finding startup ideas, the entrepreneurâs mindset, and traits of great leaders. If youâre an aspiring entrepreneur, [make sure to listen]( wherever you get your podcasts. Itâs minestron-eeee: Get funny looks when you order from a fancy restaurant? Hereâs a [useful pronunciation dictionary](. A different view of the supply chain bottleneck: The WSJ offers us an aerial view of the backlog at West Coast ports. [Check out container ships]( like youâve never seen them before. *This is sponsored advertising content GAMES [The Puzzle Section](#) Word Search: If you've ever dreamed of donning a cape and saving the world from evil villains, [today's puzzle is for you](. For the Swifties On this day in 2014, Taylor Swift released her album 1989, home to all-time classics like âBlank Spaceâ and âBad Blood.â Can you put her nine albums in chronological order? Red, Speak Now, Evermore, Lover, Taylor Swift, 1989, Fearless, Folklore, Reputation Once you figure that out...the follow-up question is: Which album is the best? SHARE THE BREW [Win Morning Brew Headphones and a Hilton Stay](#)
[Hilton giveaway promo image with headphones and two palm trees]( Want a pair of Morning Brew headphones and the opportunity to win a 5-night stay at Hilton Hotels & Resorts? You've come to the right place. Click on that large blue button below to share the Brew and win prizes this week. Here's the deets: - The first 1,000 people to refer 5 friends will receive a limited edition pair of Morning Brew headphones.
- One of those people will be randomly selected to win a 5-night stay at any Hilton Hotel & Resort in the world. Bottom line: We're already halfway through the week, so get going on referring your fave newsletter to your friends and coworkers, and swag (and maybe a stay!) will be on its way. [Click here to start sharing]( ANSWER 1. Taylor Swift (2006) 2. Fearless (2008) 3. Speak Now (2010) 4. Red (2012) 5. 1989 (2014) 6. Reputation (2017) 7. Lover (2019) 8. Folklore (2020) 9. Evermore (2020) As for her best album, the correct answer is Red. HOW WAS TODAY'S NEWSLETTER? [GREAT]( [GOOD]( [BAD]( ⤠A Note From eToro Disclaimer: eToro USA LLC; Investments are subject to market risk, including the possible loss of principal. Written by [Neal Freyman](, [Max Knoblauch](, and [Jamie Wilde]( Was this email forwarded to you? Sign up [here](. WANT MORE BREW? Industry news, with a sense of humor â - [Emerging Tech Brew](: AI, crypto, space, autonomous vehicles, and more
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