Focusing On The Positives

Grind for April 21st, 2019
FIRST SIP:
“A leader does not deserve the name unless he is willing occasionally to stand alone.”

– Henry Kissinger



It’s About Time

The Headline

Apple’s settlement with Qualcomm gives chipmaker a ‘new lease on life’

The Grind

Apple and Qualcomm this week signed a new license agreement that puts an end to years of litigation over royalties and patent infringement.

Qualcomm’s stock value surged 23% after the announcement.

“This is an enormous win for Qualcomm because the suit and related suits were life-threatening to the company,” says Roger Kay, founder of Endpoint Technologies Associates. “For Apple, a loss would have been financially punishing, but for Qualcomm, this would have destroyed business. This is like a new lease on life.”

The six-year agreement includes an undisclosed payment from Apple to Qualcomm, supposedly to make up for years of withheld royalty payments.

The Background

In January 2017, Apple sued Qualcomm over the royalties it was charging on iPhone sales. Apple said the royalties were too high and that Qualcomm was charging fees for tech it didn’t own.

Qualcomm argued that its modems were “at the heart of every iPhone” and accused Apple of illegally sharing its trade secrets with Intel.

In July 2018, Qualcomm announced that Apple would use only Intel’s modems in its next iPhone release.

This week’s unexpected agreement is no doubt related to the emergence of 5G – and to Apple’s inability to keep up with competitors like Samsung without Qualcomm’s market-leading technology.

For customers, the deal means faster (and more expensive) iPhones; for Apple and Qualcomm, it means increased quality, more revenue, and fewer headaches.



Misunderstood

The Headline

Millions of Americans are paying fewer dollars to Uncle Sam in taxes this year – they just don’t realize it

The Grind

“Ever since President Trump signed the Republican-sponsored tax bill in December 2017, independent analyses have consistently found that a large majority of Americans would owe less because of the law,” reported the New York Times last week. “Preliminary data based on tax filing has shown the same.”

This opinion contradicts claims from Democrats that Trump’s tax overhaul only benefits the rich.

“To a large degree, the gap between perception and reality on the tax cuts appears to flow from a sustained – and misleading – effort by liberal opponents of the law to brand it as a broad middle-class tax increase,” admits the Times.

The Details

Despite the tax overhaul’s immediate benefits, Democrats claimed most Americans would pay more in taxes. They also complained about taxes increasing in 2026, after the law’s individual tax cuts expire.

And it worked.

“The Democrats did a very good job” convincing people they would not benefit from the tax overhaul, explains Howard Gleckman of the Tax Policy Center. “They were able to put that into the public perception, and the reality has been unable to break that perception.”

According to the Tax Policy Center, roughly 65% of Americans paid less in taxes under the GOP law; only 6% paid more and the rest saw no change.

Another factor working in the Democrats’ favor was the way the tax cuts were implemented by the IRS. Instead of giving more money back at the end of the year, fewer dollars were taken out of each paycheck.

For many, that meant a smaller tax refund check.

I like getting money back from the government just as much as the next guy, but given the option I’d rather get more money each paycheck and not owe or receive money at tax time. The problem here is that a lot of people didn’t notice the increase per paycheck, but they noticed the smaller refund check.

In my opinion, the only real issue with the policy is that it did not ‘pay for itself,’ as Trump had suggested, but added hundreds of billions of dollars to the federal deficit.




GOOD TO THE LAST DROP:
Did you know… The Queen and her husband are both great-grandchildren of Queen Victoria.