That’s taxation for you. July 26, 2007
Posted by abheek in business, rants.add a comment
In case you missed this fly by.
From the New York Times:
The Blackstone Group, the big buyout firm, has devised a way for its partners to effectively avoid paying taxes on $3.7 billion, the bulk of what it raised last month from selling shares to the public.
Although they will initially pay $553 million in taxes, the partners will get that back, and about $200 million more, from the government over the long term.
…
Blackstone’s tax maneuver hinges on its use of good will, an accounting term for the value of the intangible assets, like a well-known brand name, that are built up by a company over time.
…
In simplest terms, the Blackstone partners paid a 15 percent capital gains rate on the shares they sold last month in the initial stock offering to outside investors (those shares represented a stake in the Blackstone management company, not its funds).
Blackstone then arranged to get deductions for itself for the $3.7 billion worth of good will at a 35 percent rate. This is a twist on the “buy low, sell high” stock market adage; in this case it would be “tax low, deduct high.”
How cell phone carriers are killing creativity July 3, 2007
Posted by abheek in rants.2 comments
Everyone these days is talking about the iPhone. As with all new things Apple comes out with, people love it or love to hate it. Except in this case, the positive reactions strongly outweigh the negatives.
Most of the criticism arises from certain basic functionality that the phone doesn’t allow for. The knee jerk “Apple should have known better and fixed this” reaction is unfair to the cell phone manufacturer, because most of these problems are dictated by carrier restrictions than Apple’s inability to resolve these issues. In this case, Apple has gotten AT&T to agree to give unprecedented concessions for the iPhone, so it’s not really surprising that they needed to concede some in return.
The main reason for this behavior, of course, is that carriers don’t want to cannibalize potentially lucrative revenue sources, such as ring-tones sales and SMS messaging. Therefore, you have a phone that is the best iPod yet, but one that cannot set arbitrary ringtones. Or a phone that can surf the full web, but one that doesn’t support instant messaging, java or flash.
That carriers are fiercely protective of their domain is old news. Their “walled garden” approach stifles creativity and innovation: just compare the openness of the internet and the innovation it spurs against the limitations of the cellular network. At one time I was hopeful that MVNO’s would open up more avenues for 3rd party applications to get onto people’s phones, but these carriers have their own set of problems.
Coming back to the iPhone. The good news, of course, is that the iPhone’s success will give Apple more leverage with carriers, which ultimately should lead to a more open feature set. Until then, however, we will have to live with minor annoyances to enjoy what is definitely the most singularly revolutionary phone yet.
