Boneless Wings #32

**NOTHING HERE SHOULD BE CONSIDERED INVESTMENT ADVICE**

Good morning to all my wingmen and wingwomen out there. Here are a few noteworthy and tasty bites worth digesting. Enjoy!

Crypto + Ukraine

It’s been over a month now that the world has witnessed Ukraine valiantly defending itself against Russia’s invasion. NATO, along with many other allies, have stepped up to support Ukraine over this time. However, there has also been an abundance of support from individual contributors around the world in the crypto community. The Ukrainian government states it has received over $70M worth of cryptocurrency donations to date (against a goal of $200M….you can donate HERE if interested). So far this represents around 1% of the Ukrainian pre-war defense budget.

Another good-for-the-world example showcasing the beneficial power of a decentralized currency. Some of the funds have been used with merchants that accept cryptocurrencies, while the majority has been converted to traditional currencies…..all going towards humanitarian and defense aide.

In truth, there are still concerns out there given both criminals and criminal behaviors being showcased with regards to cryptocurrencies. But in my mind, that’s no different than the current fiat monetary system that’s currently in place.

So, my stance remains…. point for #bitcoin.

Minimum Billionaire Tax

President Joe Biden has proposed a new minimum billionaire tax. And given I am unlikely to be impacted, I’m not too upset about it. But there are some questions and concerns that arise on the topic.

First, let’s start with its basic framework and some initial noteworthy details:

• First is a 20% minimum tax rate would apply on U.S. households worth more than $100 million. (…..not to be knit-picky, but why is it called the Billionaire tax??)

• This would target the ultra-wealthy, impacting around 20,000 households, to ensure they aren’t paying less of a tax rate than lower paid Americans….like teachers and firefighters.

• Taxable income would include unrealized gains as well.

Currently, the ultra-wealthy realize a much lower tax rate as a majority of their income tends to come from capital gains from a variety of different investments……versus receiving a straight salary from their employers like a majority of working people (…..the same teachers and firefighters above).

Hence, you may see a lot of super wealthy CEOs, business owners, hedge fund managers, etc… take only a $1 salary (yes, one US dollar) as most of their compensation comes from equity and stock and isn’t taxed the same. Simply put, they may be awarded $25M worth of stock on paper, however, they currently aren’t taxed on it until they actually sell the shares and incur what’s called a “capital gains”.

But this newly proposed tax bill would target unrealized gains, which makes this much more difficult and nuanced to assess and for many people to support. For example, how will they asses the value of those unrealized gains during tax time? What if they estimate too high and said investment/asset doesn’t meet the value estimated at tax time? Well, the Government says a credit will be applied in the future if this scenario happens….which then effectively makes this a pre-payment of capital gains.

Will we feel comfortable with how this additional administrative burden will be handled and calculated? And by we, I specifically mean not me…….but the 20,000 households and the over 700 billionaires that the government expects this to impact.

FedEx Succession

Fifty years after founding FedEx, Fred Smith announced this week that he would be stepping down as the company’s CEO in June of 2022. Smith started the company in 1973 and created a behemoth in the shipping and logistics space. It all started with his idea that FedEx could deliver packages, both small and large, much faster than the US Post Office….something that seems like a no brainer to us today. If that’s not impressive enough here are two other things to consider:

• On day one Smith/FedEx started with 14 planes and 389 team members, who delivered 186 packages…..ALL ON THE FIRST DAY OF OPERATIONS!! 👏

• Since founding the company, Smith has led the company from a zero dollar valuation (literally) to $62 billion as of yesterday. 👏 👏

Yes, impressive indeed!

Fred will be succeeded by Raj Subramaniam who has been named CEO-elect. Raj hails from the state of Kerala, India (aka God’s Own Country) and is a well-educated and experienced individual. Some of his Madden-like stats are:

• Bachelor’s degree in chemical engineering from the Indian Institute of Technology (IIT)

• Master’s degree in chemical engineering from Syracuse University

• Master’s degree in business administration from The University of Texas at Austin

• Joined FedEx at the age of 25 and worked his way up over the next 31 years to his current position.

FedEx is an iconic company born and bred in the US. So much so that its name is used more often as a verb than not. It has played a critical role in the e-commerce boom we’ve all witnessed and benefited from over the last several years. It has shifted and shaped how economies around the world operate. And it has created millions of jobs and countless wealth for many stakeholders along the way.

Let’s see if Raj can have the same level of impact and success as his boss. As always, time will tell.

Deuces. ✌️