Monthly Archives: July 2005

Recent US System Tax Articles

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The ongoing mess that is our tax code (the third link is fascinating from a taxpayer perspective):

  • Lynnley Browning:

    In late 1999, the Keeters put $188 million into an account at Deutsche Bank. The money, used in tandem with a $500 million loan from the bank, would be used to trade derivatives and options. The Keeters say they thought that they would make an unspecified return on their investment, pay back the loan, as well as generate $188 million in tax savings that could then be legitimately used to offset other gains.
    But family members said that they discovered their shelter was not legal only when the I.R.S. began auditing some of their federal tax returns – prepared by KPMG, with the Blips deductions written in – for 2000 and 2001.

  • Tanina Rostain:

    From the late 1990s into the next decade, KPMG devoted significant resources to developing and mass marketing hundreds of abusive tax shelters. These products were designed to enable their purchasers – typically high wealth individuals and Fortune 500 companies – to avoid paying taxes on the huge financial gains they enjoyed during the stock market boom. 135K PDF

  • Louise Story:

    “The tax court is seen as a place that a taxpayer ought to be able to go and get a fair shake, and the secrecy here, and the outcome in these cases, does raise the question as to whether they’re getting a fair shake,” said Alan B. Morrison, a senior lecturer at Stanford Law School, who wrote a supporting brief for the three taxpayers in the Supreme Court case.

    The court’s secrecy, “confirmed now by a major change in a decision, is a big deal, and it’s not right,” he said.

    One of Mr. Kanter’s lawyers, Richard H. Pildes, a professor at NYU School of Law, said the case reminded him of Jarndyce and Jarndyce, the never-ending lawsuit in Charles Dickens’s novel “Bleak House.”

Whole Foods Marketing Strategy

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Renuka Rayasam:

But Whole Foods Market Inc. doesn’t pay for product placements or mentions on television shows. It has managed to make its brand name synonymous with healthy living, and grow its sales at a double-digit clip, while spending little on traditional advertising and marketing.
Consumers don’t see Whole Foods ads in their local papers, during daytime television shows or even in magazines.
While other food retailers spend heavily to draw shoppers, Whole Foods counts on its brand, its reputation and targeted community efforts to bring in customers.

Falling Behind in Broadband: Orwell’s FCC

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Dana Blankenhorn:

Americans pay more for less broadband service than citizens of any other industrial country, and our take-up rate for fast Internet service is approaching Third World levels.
The reason? Lack of competition. Phone and cable networks, created under government control, have been made the private monopolies of corporate interests whose lobbyists dominate all capitals against the public interest.

David Isenberg has more.

Nanotechnology & Solar Power

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Paul Carlstrom:

Investors along Sand Hill Road in Menlo Park [CA] are pouring money into solar nanotech startups, hoping that thinking small will translate into big profits.

Both inventors and investors are betting that flexible sheets of tiny solar cells used to harness the sun’s strength will ultimately provide a cheaper, more efficient source of energy than the current smorgasbord of alternative and fossil fuels.

Nanosys and Nanosolar in Palo Alto — along with Konarka in Lowell, Mass. — say their research will result in thin rolls of highly efficient light-collecting plastics spread across rooftops or built into building materials.

Biotech Continues to Grow in San Francisco

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Steve Bergsman:

EARLIER THIS YEAR, SIRNA THERAPEUTICS ANNOUNCED it was moving its corporate headquarters from Boulder, Colo., to San Francisco — one more in the long line of biotechnology firms to put down roots in the region. From a real-estate perspective, homegrown and transplanted companies together have transformed the fabled Bay area into the largest biotech community in the country, occupying 16 million square feet. And demand for laboratory space, from San Francisco to Palo Alto, shows no sign of slowing, as the proximity of Genentech and first-rate universities beckons other research firms.

Venture Capital in Wisconsin/Milwaukee

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John Schmid takes a look at a proposed Venture Capital Fund for inner city Milwaukee.

Venture capitalists, a clique of financiers obsessed with risk and exponential growth, incubated the Internet, seeded the bioengineering boom and propelled the likes of Google, eBay, Microsoft, FedEx and Starbucks out of their infancy. Now, for the first time, they intend to apply the same approach to Milwaukee’s inner city.

VC in Wisconsin is very much a chicken and egg problem. My view is that Wisconsin lacks a risk taking, entrepreneurial environment, which is ironic because it used to exist here, in the days when manufacturing was the rage. We see evidence of this everywhere, from The Madison School District’s annual “same service” approach to budgeting in an era of constant change to our very slow adoption of the critical assets for the next generation of entrepreneurs: broadband (wifi and fiber networks to the home). Wisconsin is not a player politically in these initiatives, unlike other areas.

The truth, in my view, is that there’s plenty of money in Wisconsin. We’re simply lacking the will, and perhaps people – though I wonder about this, to apply it to new businesses.

Finally, any VC discussion must include internet entrepreneur Paul Graham’s essay: A Unified Theory of VC Suckage. (I know some venture capitalists and believe they can play an important role. The idea and execution, however are critical).

Finally, why not look at results? Madison’s fast growing (now – started in 1978) Epic Systems never took venture capital, while Berbee did (started in 1994). Judy Faulkner has run Epic from the beginning while Berbee founder Jim Berbee hasn’t run the company for years, and recently left. Foodusa, hypercosm, guild.com (apparently 40+M, including over 2m of local funds) and sonic foundry all took venture capital. A number of local biotech firms are also vc financed.

In Vitro Meat

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New Harvest:

a nonprofit research organization working to develop new meat substitutes, including cultured meat — meat produced in vitro, in a cell culture, rather than from an animal.
Because meat substitutes are produced under controlled conditions impossible to maintain in traditional animal farms, they can be safer, more nutritious, less polluting, and more humane than conventional meat.

Jean Feraca’s Here on Earth on Podcasting

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Wisconsin Public Radio’s Jean Feraca hosts a weekly program called Here on Earth. Driving around between events Saturday, I heard a bit of her program on Podcasting. A list of participants can be found here. However and unfortunately, WPR’s podcasts, like our dear Airport’s WiFi, is non-existent.
I did chuckle a bit as both Jean and the BBC’s Peter Day speculated about their job security as a result of Podcasting’s growth. Times are changing. I would agree that some radio stations have reasons to be concerned. Advertising overkill and the same old same old playlists have pushed more and more listeners away – to ipod’s attached to their car radios or ipods and short distance fm transmitters. Wikipedia on podcasting.

Mad Cow Database

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Reuters:

Last month’s discovery of the second U.S. case of the brain-wasting disease has renewed calls for the quick implementation of a trace-back system.

The National Cattlemen’s Beef Association said the database would enable federal and state animal health officials to track down herdmates of an infected animal within 48 hours of an outbreak.