Berning CPA http://berningcpa.com/ Mon, 21 Jun 2021 21:21:08 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.2 https://berningcpa.com/wp-content/uploads/2021/05/default-150x150.png Berning CPA http://berningcpa.com/ 32 32 Here’s how a Roth conversion could increase your income taxes https://berningcpa.com/heres-how-a-roth-conversion-could-increase-your-income-taxes/ https://berningcpa.com/heres-how-a-roth-conversion-could-increase-your-income-taxes/#respond Mon, 21 Jun 2021 21:14:51 +0000 https://berningcpa.com/heres-how-a-roth-conversion-could-increase-your-income-taxes/ Carefully analyze whether a Roth conversion makes sense to you. getty Many pre-retirees and retirees fear their future tax rates will rise to help pay off the massive US federal debt that is building up. As a result, they plan to convert some of their traditional and 401k IRA accounts to a Roth account in […]]]>


Many pre-retirees and retirees fear their future tax rates will rise to help pay off the massive US federal debt that is building up. As a result, they plan to convert some of their traditional and 401k IRA accounts to a Roth account in 2021. The rationale is that it might be better to pay income taxes now on their Roth conversion instead of leaving their savings in their traditional IRA. and 401k accounts and pay higher income taxes later when they withdraw from those accounts in retirement.

MORE FORBESWhy would you convert your IRA or 401k account to a Roth account?

It sounds like a good plan, but is it? If you’re not careful, it is possible that you will end up paying more income taxes throughout your life with a Roth conversion.

To illustrate the tax issues with a Roth conversion, let’s look at the example of Jack and Teresa, a 60-year-old married couple who analyze whether it makes sense to convert some of their 401k savings to Roth in 2021. They work and earn a combined income of $ 275,000 per year. They plan to accumulate $ 1 million in retirement savings by the time they retire at age 65.

Jack and Teresa will use a version of the Safe spending in retirement strategy to generate retirement income. To do this, they will devote a portion of their savings to a Social Security bridging strategy, which will help maximize the lifetime income they expect to receive from Social Security. They plan to invest their remaining savings and use the IRS-required minimum distribution rule withdrawal percentages to calculate their annual withdrawal amounts. They also plan to withdraw an additional $ 5,000 per year for the first 10 years of retirement to help pay for travel expenses while they are still healthy and able to travel.

For 2021, Jack and Teresa estimate that they will use the standard federal tax deduction and have no special tax credits. They predict that they will pay a total of $ 48,017 in federal income taxes without a Roth conversion. In this case, their marginal income tax rate is 24% (the rate they would pay on income in the highest tax bracket that applies to them).

When they reach age 65 and retire, they would project their total Social Security retirement income, their Social Security gateway strategy, and annual withdrawals would amount to $ 95,951. In their first year of retirement, they expect to pay federal income taxes at a marginal rate of 12% and pay a total of $ 7,394 in federal income taxes.

But suppose Jack and Teresa plan to convert $ 50,000 of their savings into a Roth account in 2021. If they do, they would pay federal income taxes for 2021 on the amount of their Roth conversion. The conversion would be taxed at a rate of 24%, which would result in additional federal income taxes of $ 12,000.

If current tax rates still apply after they retire at age 65, there’s a good chance Jack and Teresa will still pay federal income taxes at a marginal rate of 12%. Their future tax savings from the Roth conversion in 2021 will never be able to offset the additional $ 12,000 in taxes they should have paid in 2021. Their marginal tax rate in retirement would have to be doubled from 12 % to 24% – for Jack and Teresa to break even with a Roth conversion in 2021. However, a doubling of our federal tax rates is unlikely to happen, so they would be more likely to don’t choose a Roth conversion.

If your situation is similar to Jack and Teresa’s, would you really want to bet that future tax rates will go up by that much?

MORE FORBESBe careful with a Roth conversion

But what if Jack and Teresa saved more at 65? If they accumulated $ 1,500,000 instead of $ 1,000,000, they would still pay federal income taxes at a marginal income tax rate of 12% in retirement. But if they accumulated $ 2,000,000 when they retire, they would most likely pay federal income taxes at a marginal rate of 22% in retirement. Income tax rates would only need to increase from 22% to over 24% for a Roth conversion in 2021 to be profitable. Since this is only 2%, if they really believe tax rates will increase in the future, it might be wise for them to consider converting some funds to Roth.

This example illustrates some basic concepts of retirement financing:

  • The vast majority of early retirees and retirees have less than $ 1.5 million in savings. Under the current tax rate structure, they will most likely pay federal income taxes at a marginal rate of 12% or less in retirement. So a Roth conversion is unlikely to help them save income tax over their lifetime, even if tax rates increase in the future.
  • If you have accumulated $ 2 million or more for retirement, whether a Roth conversion can help you save money will depend on several factors and assumptions, many of which may be unique to your situation. Because it’s hard to generalize about the benefits of a Roth conversion for high net worth retirees, it’s worth preparing a solid analysis or asking your tax accountant to help you out so you can estimate if you’ll save. income tax with a Roth conversion.

If you would like to see a detailed analysis of Roth conversions for high net worth retirees, please read this helpful article titled When and for whom are Roth conversions most beneficial?

SsrnWhen and for whom are Roth conversions most beneficial? A new set of guidelines, cautions and warnings

The bottom line? Look beyond the headlines on Roth conversions and take the time to determine if the benefits of a Roth conversion will apply to you.



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The decision of the court of first instance after voluntary dismissals deemed to be wrong https://berningcpa.com/the-decision-of-the-court-of-first-instance-after-voluntary-dismissals-deemed-to-be-wrong/ https://berningcpa.com/the-decision-of-the-court-of-first-instance-after-voluntary-dismissals-deemed-to-be-wrong/#respond Mon, 21 Jun 2021 19:20:00 +0000 https://berningcpa.com/the-decision-of-the-court-of-first-instance-after-voluntary-dismissals-deemed-to-be-wrong/ Law360 (June 21, 2021, 3:20 p.m. EDT) – A Florida state appeals court ruled on Friday that a lower court had lost jurisdiction to bring a final motion or judgment in a derivative lawsuit of a shareholder concerning an Orlando daycare after the parties filed a joint notice of dismissal during the trial. A unanimous […]]]>


Law360 (June 21, 2021, 3:20 p.m. EDT) – A Florida state appeals court ruled on Friday that a lower court had lost jurisdiction to bring a final motion or judgment in a derivative lawsuit of a shareholder concerning an Orlando daycare after the parties filed a joint notice of dismissal during the trial.

A unanimous panel of three Fifth District judges overturned Ninth Circuit Judge Chad K. Alvaro’s decision to render final judgment in the case and order appellants to pay respondents over $ 95,000 two years later that the parties filed the notice of voluntary revocation in the complaint.

“The appellants contend that the notice of voluntary termination, without …

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Fraud likely to increase after pandemic https://berningcpa.com/fraud-likely-to-increase-after-pandemic/ https://berningcpa.com/fraud-likely-to-increase-after-pandemic/#respond Mon, 21 Jun 2021 19:13:00 +0000 https://berningcpa.com/fraud-likely-to-increase-after-pandemic/ Fraud professionals anticipate an increase in fraud this year after seeing it increase since the start of the COVID-19 pandemic last year. A report published Monday by the Association of Certified Fraud Examiners and Grant Thornton at ACFE’s annual Global Fraud Conference, interviewed a group of fraud professionals from around the world and found that […]]]>


Fraud professionals anticipate an increase in fraud this year after seeing it increase since the start of the COVID-19 pandemic last year.

A report published Monday by the Association of Certified Fraud Examiners and Grant Thornton at ACFE’s annual Global Fraud Conference, interviewed a group of fraud professionals from around the world and found that 71% were expect the level of fraud affecting their organizations to increase over the next year. More than half of the 1,539 respondents (51%) said their organizations had discovered more fraud since the start of the pandemic, with a fifth indicating a significant increase in the number of fraud detected. In contrast, only 14% of organizations surveyed discovered less fraud. Organizations Prepare for Expected Increase in Fraud, With 38% of Organizations Increasing Their Budget for Anti-Fraud Technology in FY2021, with Technology Most Common Area for Increased Program Investments anti-fraud. Over 80% of organizations have already implemented one or more changes to their anti-fraud programs in response to COVID-19.

The pandemic has opened up risks of fraud, with many employees being forced to work remotely from their homes, exposing access to financial and accounting systems at any time of the day or night from unsecured home offices, and rendering more difficult the visit of the offices and the financial audit. files in person. Many organizations have responded by increasing their use of technology to protect against fraud and perform remote audits, but the technology itself still poses challenges.

“The most common pandemic-related challenges facing anti-fraud programs are changes in investigative processes and changes in the control / operating environment,” the report says.

As the United States and other countries emerge from the pandemic, they will face other challenges. “Changes in business operations and changing consumer behavior are the two main risk factors that are expected to impact the fraud risk landscape over the coming year,” according to the report.

In the first months of the pandemic, anti-fraud professionals were already anticipating an increase in fraud. For a report released last year, ACFE interviewed them in May 2020 and found that 93% of those surveyed expected an increase in the overall level of fraud in the coming year. The level of fraud awareness has only increased since this pandemic period. Over 60% of respondents observed a significant or slight increase in their organization’s fraud awareness, and only 7% indicated that it had decreased.

Anti-fraud professionals use remote technology to work together in their anti-fraud efforts. “The key things are having a good platform, secure VPN access for your investigators, and a file transfer portal for people to share documents,” said Erik Lioy, partner at the accounting firm Dixon Hughes Goodman and member of the forensic department of DHG. the practice of evaluation services, during a presentation at the ACFE conference. “For a while, we all connected through Zoom, even though we didn’t need to talk. I think we’re all used to being in a conference room so we would all be logged in and if someone had a question they didn’t need to call someone or email them . They might just say, ‘Hey, I’m looking at what you’ve done for me. Could you explain it to me again or explain this to me? ‘ We have found it to be really effective. You don’t want to do this eight hours a day or five days a week, but for a few hours a few days a week, it was a really effective way to alleviate being apart.

Now that the country is starting to emerge from the pandemic, they can meet in person. “My team has all been vaccinated,” Lioy said. “In fact, we get together and whiteboard in conference rooms a lot more often. “

Fraud investigators can spot some telltale signs of fraudulent behavior. “Sudden changes in the lifestyle of procurement staff could be indirect signs that they may be receiving certain bribes, or types of gifts and payments,” said Hyung Kim, senior researcher at the organization. world of intellectual property, during another presentation of the ACFE conference. “Supplier irregularities and shadow suppliers is another commonly observed behavior. Authors can use bogus shell companies to bid for contracts or create an appearance of competition. This type of action appears in purchasing services and consumables that are standardized and easily or easily available. Some indicators of possible supplier irregularity include a lack of supplier information on global listings or on the Internet, missing contact details, or the use of a PO box or non-commercial address. It is also important to verify the contact details or address provided by the sellers because in some cases you will end up finding that this address is a store that sells general products or even an empty restaurant or warehouse or private residence.

Law enforcement professionals can be pressured when trying to report potential wrongdoing, even when it is part of their job in government. “My team was under tremendous pressure, and that included people chasing me left, right and center,” said Thuli Madonsela, the former public protector of South Africa and currently a professor at the University of Stellenbosch, during a keynote address at the ACFE Conference. “They sued me for perjury, who is lying in court. When you lie about the facts, you cannot lie about the law because only a judge can determine what the law is.

She was forced to say that she had changed her mind, even by anti-corruption authorities in a particularly difficult case. She had always believed that the powers of the Public Protector were binding and that she had a duty under the South African constitution to investigate and report corruption and take appropriate action. “My take was that taking the right action means you can recommend or order,” she said.

She and her team all agreed that this was the correct reading of the constitution. Madonsela is one of the framers of the South African constitution and has helped draft several laws to build democracy in South Africa. As a full-time commissioner of the South African Law Commission, she oversaw several investigations focused on aligning all laws with the constitution.

“The choice we all have to make sometimes is to look good or be good, and in this case we chose to look bad but to do what we thought was the right thing,” she said.

Anti-fraud professionals need to be able to work collaboratively, whether they work in the same firm or in different organizations around the world. “We are in a community just as scammers are in a community,” said Brian Davis, fraud manager at eBook publisher Scribd, in another presentation at the ACFE conference. “We are not alone in this fight, and we can work together and share different tips, tricks and ways of going about it, ways to help build your team, ways to grow your fraud program, in order to fight against theft. We are really in the same boat. “



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Continuous Disclosure – Surviving a Forensic Audit The “My Decision” and Your Obligations https://berningcpa.com/continuous-disclosure-surviving-a-forensic-audit-the-my-decision-and-your-obligations/ https://berningcpa.com/continuous-disclosure-surviving-a-forensic-audit-the-my-decision-and-your-obligations/#respond Mon, 21 Jun 2021 05:55:01 +0000 https://berningcpa.com/continuous-disclosure-surviving-a-forensic-audit-the-my-decision-and-your-obligations/ At the end of 2019, the first judgment of a superior court in a shareholder class action in Australia was delivered by Judge Beach of the Federal Court of Australia in the case of TPT Patrol Pty Ltd as director of Amies Superannuation Fund v Myer Holdings Limited. The founding decision (a victory for Myer) […]]]>


At the end of 2019, the first judgment of a superior court in a shareholder class action in Australia was delivered by Judge Beach of the Federal Court of Australia in the case of TPT Patrol Pty Ltd as director of Amies Superannuation Fund v Myer Holdings Limited.

The founding decision (a victory for Myer) clarifies several important issues that had been “known unknowns” so far, offering important lessons to economists, lawyers and in-house legal advisers.

This two-part article explores the implications of the ruling from a forensic, economic, and accounting perspective – and tackles unresolved mysteries that may be resolved in the upcoming Australian judgment. In Part I, we discuss the main lessons learned from the Myer decision regarding disclosures and the implications for lawyers and in-house legal counsel.

In Part II, we discuss the main lessons from the Myer decision regarding economic and forensic analyzes.

The Myer decision confirms the importance of respecting continuous disclosure obligations as well as disseminating information through interactions with analysts. The decision also underlines the importance for in-house legal advisers to “take stock” when making a quick decision to create detailed disclosure chains that will survive a forensic audit. This is especially important in a market environment affected by a global pandemic, as companies are forced to make sudden decisions, change their business plans in the wake of unusual market conditions, and revise their forecasts.

The Myer Case: Background

Myer is one of Australia’s largest department store groups, operating 60 stores across Australia. On September 11, 2014, in a session with financial analysts and journalists, Myer’s chief executive Bernie Brooks revealed that he expected Myer’s NPAT for fiscal 2015 to be higher than NPAT for fiscal 2014, which was announced that day at $ 98.5 million.

On March 2, 2015, Myer told analysts that the company is evaluating its continuous disclosure obligations by reference to the consensus of NPAT analysts.

On March 19, 2015, Myer announced that the company expected its NPAT to be between $ 75 million and $ 80 million, excluding one-time costs. Following this announcement, the Myer share price fell by more than 10%. Finally, on September 1, 2015, Myer reported a fiscal year 15 NPAT of $ 77.5 million.

The plaintiff claimed that Myer’s statements caused losses to its shareholders by artificially inflating the price of Myer stock between September 11, 2014 and March 19, 2015. Shareholders also claimed that Myer should have made a series instead counterfactual disclosures.2

Court ruling: continued disclosure violation – but no loss

The Court concluded that although Myer breached his continuous disclosure obligation, the plaintiff failed to prove that the shareholders suffered a recoverable loss as a result of the breach.

The ruling means that companies cannot evade their disclosure obligations simply because they believe the information at issue was already public, as it can still be concluded that they violated continuous disclosure rules. However, this is also important for claimants who are considering filing class actions. If the impact of the counterfactual disclosure is already factored into the share price on the date it should have been issued, claimants will not be able to recover any damage under an inflation-based measure for estimate shareholder losses.

VALUATION OF LOSS PER SHARE

In the Myer case, the plaintiff only proposed an inflation-based measure for its loss analysis, which the court accepted. There are other “loss per share” measures that the plaintiff could have suggested. The Myer decision articulates four different methodologies to assess loss per share

The Court did not express a preferred method. So that will be one of the questions left for another judgment. But at least now we have greater clarity on which methods will be considered by the Court, as we are dealing with a set of “known unknowns” rather than “unknown unknowns”.

In our view, the most significant implication of the decision is the confirmation that, for all potential loss per share measures, the loss per share for a shareholder depends on the “price paid” when the shareholder acquired his interest.

For an inflation-based measure, Australian shareholder experts can estimate the losses per share as inflation at the time of purchase (i.e., the outflow of funds that would not have not occurred without fault) taking into account offsetting gains if the shares are sold at an inflated price.

As the Myer ruling confirms, inflation would depend not only on the company’s disclosures, but also on all other relevant public information released (including analyst reports and company conference calls).

LEARNING FOR INTERNAL ADVISORS

Continuous disclosure obligations in complex organizations have always been very difficult. The current need to react quickly to volatile market conditions makes it even more difficult for in-house legal advisers to manage this issue.

However, the Myer case underscores the importance of “pressing a pause” during quick decision-making to create detailed disclosure chains that will survive a forensic audit.

In making its decision, the court undertook a very detailed and forensic analysis of “who knew what when”. The weekly and daily financial information was reviewed, examining how this information was reflected in the company’s financial forecast as well as what, when and how it was presented to the Board.

The Court reviewed not only the official minutes of Council meetings, but also communications before and after the meetings. He even took into account the directors’ memories of the context of the discussions.

Internal legal counsel should ensure that the organization can balance competing priorities between supporting the disclosure audit trail and practicing good “information governance”. On the one hand, the need to maintain support for their disclosure audit trails involves ensuring that the necessary data is retained. On the other hand, good information governance means a data retention and disposal policy that only retains what is necessary. The lawyer needs to know what data is being held, why it is being held and where it is being held.

Since the damages that a company may have to pay critically depend on all public information relating to the alleged violation, it is important to provide analysts with as much detail as the company can reasonably do about cash flow. expected futures, including potential risks, forecast limitations, and any potential changes in business strategy being planned.

LEARNING FOR LAWYERS

The Myer case is also a good example of the difficulties faced by lawyers in instructing experts on quantum issues before the Court has decided the question of liability.

In our experience, one of the most difficult aspects of assessing losses (in any type of litigation) is articulating an appropriate counterfactual scenario and quantifying the associated damages. The Myer case clearly shows that investigating lawyers must take care to ask the right questions of their experts.

Regarding “how” to educate experts, the Myer decision emphasizes that assumptions must be based on business reality. The Court went to great lengths to establish, in detail, the typical trading cycles and reporting models of the company. Investigating lawyers and their experts should consider whether the inflation analysis for the proposed counterfactual disclosure requires more than one assumption (some of which may depend on other assumptions). The presence of excessive assumptions may indicate that the counterfactual is “too hypothetical” and not based on reality, and there is a risk that if one set of assumptions don’t hold up, the rest may fall like a house of cards.

As for the “when” to hire experts, a court ruling on liability is often required in order to identify the appropriate counterfactual scenario to be quantified. This is sometimes solved by having experts model multiple scenarios up front, bifurcating an audience between liability and quantum issues, referring the quantum issue to a special arbitrator, or asking experts to undertake. further work on quantification after a decision has been made. rendered. In Myer, His Honor made it clear that he preferred to have two opposing experts as opposed to a court appointed expert or a special arbitrator. However, this case also provides a good example of a scenario where a court’s decision on the correct counterfactual analysis had a direct impact on the proper quantum analysis by experts. This is therefore an example of the benefit of expert analysis after the hearing.

We will discuss the lessons learned from the Myer decision for expert analysis in the next part. The Myer decision provides important information on acceptable approaches to calculating damages and the ways in which a defendant’s expert might refute them.



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Karachi Power Needs Investments https://berningcpa.com/karachi-power-needs-investments/ https://berningcpa.com/karachi-power-needs-investments/#respond Mon, 21 Jun 2021 01:00:00 +0000 https://berningcpa.com/karachi-power-needs-investments/ Earlier this year, millions of homes in Texas were without power for days in what is considered one of the worst electricity crises in world history. Houston is truly an example. The Texas power grid was built for efficiency, but not for climate resilience and the resulting changes in operational requirements. Katherine Blunt and Russell […]]]>


Earlier this year, millions of homes in Texas were without power for days in what is considered one of the worst electricity crises in world history. Houston is truly an example. The Texas power grid was built for efficiency, but not for climate resilience and the resulting changes in operational requirements.

Katherine Blunt and Russell Gold reported in the Wall Street Journal: “A fundamental flaw in the Texas freewheeling electricity market has left millions of people helpless and frozen in the dark (this week) during a cold snap. history… A severe storm crippled nearly every source of energy, from power plants to wind turbines, because their owners failed to make the necessary investments to generate electricity at sub-freezing temperatures. While the electricity providers have collectively failed, the companies themselves have not broken any rules.

Ed Hirs, professor and energy researcher at the University of Houston, cited the emphasis on cheap energy that led to the exclusion of reliability at the heart of the Houston problem. Essentially, the quest for efficiency and “low cost” has led to “underinvestment” and poorly prepared energy facilities for extreme weather conditions and operational dynamics – echoing the need for flexibility in investment plans. electric utilities.

The real Houston case leads to the following two questions of sustainable investment in the electricity sector and its two related dimensions:

1. Should this investment be financed by the private or public sector in Pakistan, especially in transmission and distribution, and 2, the mantra of a constant low tariff without providing an adequate return to private sector investors for ” capital investment ”a recipe for disaster?

These are the fundamental questions to which many developing countries, including Pakistan, cannot be answered. The policies of the last three decades in this sector do not reflect an adequate framework for future growth and it is all the more difficult for privatized entities like K Electric. The effects of this issue have been briefly discussed in the following paragraphs.

Specialty of the utility company

The utility company is not like most other businesses. Utilities are subject to special accounting rules and pre-set ROIs, where ordinary business incentives often don’t matter and it’s extremely difficult to change course.

The performance of utilities and their sustainability, which is critical for consumers, is primarily derived from the ‘investment’ in the assets (pipelines, substations, transmission lines, etc.) that are used to supply service and efficiency in the management of existing assets and systems.

The monopoly model of public services is not unique to Pakistan. “Regulated monopolies” in which public officials or the regulator guarantee private sector companies a return on their investments while setting prices for consumers are the predominant model in the world.

To understand this question in the correct perspective, two very relevant terms with special meaning and significance in this industry should be fully deciphered. The first is “regulation” and the second word is “loss”.

In summary, when it comes to regulation for the foreseeable future, it would not be possible for countries like Pakistan to deregulate important utility like electricity in the way that private companies are allowed to generate and supply. electricity at competitive market-based prices. This means that regulations will continue to exist, and in these circumstances, monopoly latitude may be given to the supplier as this monopoly is effectively established through government regulation on the main ingredient being the supply price and return on investment. by the regulator being NEPRA in the case of Pakistan.

The second term is “loss”. Losses are not only bad, but also suicidal for society if utility companies are not sustainable in their operational and investment functions.

However, here it is very important to distinguish between “subsidy” and “loss”. The subsidy is the price differential, the cost of production / purchase of electricity and the supply price regulated as national economic policy. In other words, the correct description of a subsidy is the price of electricity borne by the government as a public welfare activity for economic reasons. The amount of the “subsidy” for any utility company should not be taken as an indicator of the effectiveness of that entity. Thus, a real difference in tariff price – in effect a credit on the revenue side – must be completely dissociated from a perception that this sum is compensation for losses, if any, suffered by the electricity company.

In the case of Pakistan, the consumer tariff is determined by the National Electricity and Electricity Regulatory Authority (NEPRA) and notified by the government. It is uniform throughout Pakistan. A uniform rate means that the same type or category of customers pay the same price per unit, regardless of the province in which they are based. The categories, or slabs, as they are more commonly called, are determined by the government and applied indiscriminately across Pakistan. Under Pakistan’s current tariff regime, customers pay less than the actual cost of electricity, and the difference is paid by the government.

The regulator, in Pakistan as elsewhere in the world, is responsible for reviewing and approving investments in tariffs to ensure spending is prudent and reasonable to strike the right balance between sustainable levels of service to businesses and consumers. As a result, old distribution companies WAPDA and K-Electric are often seen appearing before NEPRA to make arguments about how much they should invest.

Investment-friendly tariffs create suitable future public services. Years of underinvestment in the Transmission & Distribution segment of Pakistan’s power sector has been the main reason for the lack of reliable power supply, costing the economy billions. The certainty of investment in tariffs is a prerequisite for private sector participation in the T&D segment.

Given the dire state we find ourselves in, there is a need to develop strategies that incentivize utilities to invest, build the resilience of their systems, and continuously upgrade them.

To achieve this, public services, especially in the private sector, must be sustainable and have sufficient motivation to reinvest in the system. Therefore, instead of keeping investment plans rigid and seeing them as effective, an investment-friendly tariff should be targeted. This will automatically ensure that utilities are able to make investments in a sustainable manner. This in turn benefits consumers while closely monitoring that investments are made according to commitments.

Are we ready?

As publicly reported, K-Electric (KE) which supplies electricity to Karachi has already invested over US $ 3 billion in the electricity value chain, including a transmission capacity improvement project. of 450 million US dollars. A US $ 650 million project is underway to install 900 MW of RLNG-based generation. The utility has also invested in the modernization and strengthening of the distribution network, including a 9 billion rupee project entirely dedicated to strengthening infrastructure as part of the company’s plans for rain and season mitigation. monsoons.

An additional 10 billion rupees is being invested in the city’s 12 most densely populated districts – which are home to two-thirds of the city’s population and a high prevalence of katchi abadis – to install bundled overhead cables, bring in low-cost meters cost to residents so that they can have a regularized electricity supply.

However, is it worth asking whether this investment path is sustainable if the utility is not allowed to recoup these costs in the tariff? Otherwise, it will be suicidal for the country’s economy. Karachi’s rapid expansion, the construction boom spurred by government policies, and other infrastructure problems due to unplanned settlements have increased the need for capital spending exponentially.

Currently, KE’s investment limits are capped in the tariff and they have no incentive to invest more in the system. Without adequate returns on investment and the outstanding issues of overdue payments from government and associated entities, KE borrows from financial institutions to meet its working capital needs, a figure exceeding PKR 100 billion. This poses a threat to the operations of the public service.

If the incentive is absent, utilities have two choices: continue to operate at current levels and let the level of customer service deteriorate, or ask the regulator to allow planned investments and wait for a nod to continue. In Pakistan, such deliberations typically take between one and two years to complete. KE has already advocated for new investments in its “mid-term review”.

In KE’s case, if the requested investments are not authorized, the utility may inadvertently be forced to suspend ongoing and planned investments. If the tariff adjustments for investments do not materialize, KE, and with it Karachi, will go into economic regression. At the end of the day, the burden will always be on the government and the customers because we will have a problem. In fact, there is no choice. Invest – the sooner the better for all stakeholders.



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Discussions on infrastructure bill collide with Democrats’ goal of taxing the rich https://berningcpa.com/discussions-on-infrastructure-bill-collide-with-democrats-goal-of-taxing-the-rich/ https://berningcpa.com/discussions-on-infrastructure-bill-collide-with-democrats-goal-of-taxing-the-rich/#respond Sun, 20 Jun 2021 19:05:03 +0000 https://berningcpa.com/discussions-on-infrastructure-bill-collide-with-democrats-goal-of-taxing-the-rich/ But Democrats see a changed landscape. The ProPublica report added fodder. But even before the pandemic recession, corporate tax revenues had plunged 40% after Trump’s tax cuts. Although the 2017 tax law ostensibly lowered the corporate tax rate to 21%, from 35%, the effective corporate rate fell to 8%, said Representative Lloyd Doggett of Texas, […]]]>


But Democrats see a changed landscape. The ProPublica report added fodder. But even before the pandemic recession, corporate tax revenues had plunged 40% after Trump’s tax cuts. Although the 2017 tax law ostensibly lowered the corporate tax rate to 21%, from 35%, the effective corporate rate fell to 8%, said Representative Lloyd Doggett of Texas, a senior Democratic official from the Ways and Means Commission.

“There has been a big change in the attitude of voters towards taxes,” Wyden said. “For the last 10 years, Republicans have always wanted to talk about taxes, nail these Democrats on taxes, ‘tax and spend’ and everything in between. Now the American people are sympathetic to our point of view that everyone should pay their fair share. “

Democrats are divided on which way to go. Massachusetts Democrat Senator Elizabeth Warren last week lobbied Treasury Secretary Janet L. Yellen over the wealth tax proposed by Ms Warren, which would impose a 2% surtax on the value of assets held by people worth more than $ 50 million – and would increase to at least $ 3 trillion.

“It’s about choices,” she told a reluctant Ms Yellen. “We can fund universal child care, or we can give Jeff Bezos enough tax savings to build a superyacht.”

Other Democrats, even Liberals, aren’t so sure.

“The entire duration of a wealth tax frightens a lot of people who hope to acquire some wealth,” said Mr. Doggett. “We don’t want to discourage economic success. We just want to level the playing field. ”

Senator Mark Warner, Democrat from Virginia, is stuck in the middle. As a pro-business Democrat, he was approached by Mr Wyden to prepare a corporate tax plan with Senator Sherrod Brown of Ohio, a pro-Labor Democrat. But he is also a member of the group that is negotiating the bipartite infrastructure agreement.

He said he was confident there would be unanimous support among Democrats to include the international tax framework in a reconciliation bill that would follow a tighter infrastructure compromise, “because it’s so complicated. “.



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Governor Signs Broad Tax Cut Bill with Controversial Mental Health Funding Update | New https://berningcpa.com/governor-signs-broad-tax-cut-bill-with-controversial-mental-health-funding-update-new/ https://berningcpa.com/governor-signs-broad-tax-cut-bill-with-controversial-mental-health-funding-update-new/#respond Sat, 19 Jun 2021 16:00:00 +0000 https://berningcpa.com/governor-signs-broad-tax-cut-bill-with-controversial-mental-health-funding-update-new/ (The Center Square) – The tax cuts and mental health funding realignment program signed by Gov. Kim Reynolds is being described by Republican lawmakers in Iowa as a significant achievement. Senate File 619 passed on May 18 in an extended legislative session to deal specifically with tax matters, and was signed by the governor on […]]]>


(The Center Square) – The tax cuts and mental health funding realignment program signed by Gov. Kim Reynolds is being described by Republican lawmakers in Iowa as a significant achievement.

Senate File 619 passed on May 18 in an extended legislative session to deal specifically with tax matters, and was signed by the governor on Wednesday.

“Today the Iowa Senate made Iowa more competitive,” Senate Majority Leader Jack Whitver, R-Ankeny said last month. “Reducing the top tax rate to 6.5% means families in Iowa will keep more of the money they earn. Lower tax rates make this state more attractive for small businesses and people looking for new accommodation, ”he said.

“The gradual elimination of inheritance tax puts an end to the unfair practice of taxing the dead. Eliminating the mental health tax finally offers real property tax relief to the people of Iowa. The people of Iowa have asked for tax relief and the Iowa Senate has responded to those calls, ”Whitver added.

Senator Dan Dawson, R-Council Bluffs, Chairman of the Ways and Means Committee, concurred with this opinion.

“Senate Republicans promised bold tax reform when the session began in January and this bill was honored,” he said. “This bill includes the elimination of tax triggers, the elimination of inheritance taxes, tax relief for small businesses and tax cuts for Iowa families. Senate File 619 is the bill tax that the people of Iowa deserve and I am proud that it passes the Iowa Senate. “

However Senate Minority Leader Zach Wahls D-Coralville, commenting at the end of the session on his blog, saw this year as a failure.

“With our Build Back Better plan, the Democrats in Iowa have introduced more than two dozen bills to help the people of Iowa get back on their feet… Sadly, Governor Reynolds and the Republicans have chosen not to not work with us on these proposals. ” Wahls says their ideas would have ensured long-term economic growth.

Democrats and Republicans largely disagree on the pros and cons of the 2021 session; Likewise, the votes on the tax bill closely followed party lines. Senator Pam Jochum, D-Dubuque, supported most of the bill’s provisions, but the transfer of mental health funding to the state broke the deal.

Jochum told The Center Square the result will cut funding to the 14 mental health regions. The mental health provisions shift funding from regional property tax to statewide support over the next two years. Jochum said that a system that has been in place for a long time will not work well at the state level, “It’s best when you give it to the people closest to the situation.”

Jochum says she takes mental health care very seriously and personally. Her intellectually disabled daughter Sarah died two years ago from brain damage after falling down the stairs. Still, she thinks the dollars for mental health might not go down: “I really hope I’m wrong, but at the moment I think it won’t work the way they proposed.

Of course, the dollars saved are of great importance to all parties. The estimated personal tax savings over the next 10 years are $ 1 billion. This works out to about $ 125 million per year. Annual savings per person are projected at $ 40.

Of course, determining what a specific family or business will earn varies widely.

Dr. Ernie Goss is a regional economist who oversees the Mid-America Business Conditions monthly report.

Goss doesn’t minimize the cumulative benefits of $ 1 billion over 10 years, even though $ 40 may seem insignificant. And he told The Center Square that there are so many provisions in the law that it challenges providing adequate insight to consumers and what that will mean to them.

Jochum thinks the bill was just too massive and should have been broken down into smaller pieces. She says she could have voted for several of these pieces.

Kristine Tidgren, director of the Iowa State Center for Agricultural Law and Taxation, wrote on an Iowa state website that the legislation has eight main provisions and 18 additional provisions. In other words, adds Goss, the average person would need a tax accountant rather than an economist to fully explain the impact.

Nonetheless, Goss considers several of the provisions to be positive for economic growth. Shifting mental health costs from local property taxes to the state level is helpful: “Probably a good change and needs to be done. Property taxes can be quite onerous. I owned a house in Iowa.

Goss also says removing federal taxes as a deduction from Iowa taxes was a smart move. This previous wording gave the impression that Iowa had a higher tax burden than other states that had already waived this deduction. The state thus becomes less attractive for internal expansion and foreign investment. Neighboring Missouri and South Dakota, in particular, have lower tax rates than Iowa.

Hawkeye state joins three other states that have reduced income tax rates since the start of the pandemic: Idaho, Oklahoma and Montana. This data comes from the Tax Foundation.

Compare that with New York where the pandemic hardly affected tax revenues. Yet Albany recently increased personal and corporate tax rates. Governor Reynolds has said she will call for further tax cuts during legislative sessions in 2022.



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Oxford Industries (NYSE: OXM) increases dividend to US $ 0.42 https://berningcpa.com/oxford-industries-nyse-oxm-increases-dividend-to-us-0-42/ https://berningcpa.com/oxford-industries-nyse-oxm-increases-dividend-to-us-0-42/#respond Sat, 19 Jun 2021 14:28:23 +0000 https://berningcpa.com/oxford-industries-nyse-oxm-increases-dividend-to-us-0-42/ The advice of Oxford Industries, Inc. (NYSE: OXM) announced that it will increase its dividend on July 30 to $ 0.42. The announced payout will bring the dividend yield to 1.3%, which is in line with the industry average. Check out our latest review for Oxford Industries Oxford Industries distributions can be difficult to maintain […]]]>


The advice of Oxford Industries, Inc. (NYSE: OXM) announced that it will increase its dividend on July 30 to $ 0.42. The announced payout will bring the dividend yield to 1.3%, which is in line with the industry average.

Check out our latest review for Oxford Industries

Oxford Industries distributions can be difficult to maintain

While it’s always good to see a solid dividend yield, we also need to consider whether the payout is achievable. Even though Oxford Industries does not generate a profit, it generates healthy free cash flow that easily covers the dividend. We generally think cash flow is more important than accounting measures of profit, so we’re pretty comfortable with the dividend at this level.

Recently, EPS fell 35.4%, which could continue next year. While this does mean the business will not be profitable, we generally think the cash flow is greater and the current payout ratio is quite healthy, which is reassuring.

NYSE: Historic OXM Dividend June 19, 2021

Dividend volatility

While the company has been paying a dividend for a long time, it has reduced the dividend at least once in the past 10 years. Since 2011, the dividend has increased from US $ 0.44 to US $ 1.48. This implies that the company has increased its distributions at an annual rate of approximately 13% over this period. Dividends have grown rapidly during this time, but with reductions in the past, we are not sure this stock will be a reliable source of income in the future.

The potential for dividend growth is fragile

Growth in earnings per share could be a mitigating factor considering past dividend fluctuations. Oxford Industries’ earnings per share have declined 35% per year over the past five years. This sharp drop may indicate that the company is going through a difficult time, which could limit its ability to pay a larger dividend each year in the future.

The dividend could prove to be unreliable

Overall, we still like to see the dividend go up, but we don’t think Oxford Industries will make a good stock of income. Payments haven’t been particularly stable and we don’t see huge growth potential, but with the dividend well covered by cash flow, it could prove to be reliable in the short term. We would probably look elsewhere for an income investment.

It is important to note that companies with a consistent dividend policy will generate greater investor confidence than those with an erratic policy. However, there are other things for investors to consider when analyzing the performance of stocks. As an example, we have identified 2 warning signs for Oxford Industries that you need to know before you invest. If you are a dividend investor, you can also view our organized list of high performing dividend stocks.

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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St does not have any position in the mentioned stocks.
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Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.



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Man sues New Mexico agency for explanation of unemployment debt | Local News https://berningcpa.com/man-sues-new-mexico-agency-for-explanation-of-unemployment-debt-local-news/ https://berningcpa.com/man-sues-new-mexico-agency-for-explanation-of-unemployment-debt-local-news/#respond Sat, 19 Jun 2021 02:45:00 +0000 https://berningcpa.com/man-sues-new-mexico-agency-for-explanation-of-unemployment-debt-local-news/ Tenbears Souter’s lawyer likened the case to a Kafka novel. Jemez Springs man wants state district court judge to order State Department for Workforce Solutions to provide $ 24,000 unemployment benefit account that agency said he fraudulently received while actually working. But Souter’s lawyers say he was unaware he was charged with fraud dating back […]]]>


Tenbears Souter’s lawyer likened the case to a Kafka novel.

Jemez Springs man wants state district court judge to order State Department for Workforce Solutions to provide $ 24,000 unemployment benefit account that agency said he fraudulently received while actually working.

But Souter’s lawyers say he was unaware he was charged with fraud dating back to 2018 until he applied for unemployment benefits in 2020 amid the coronavirus pandemic and it was told him that his request could not be processed until he refunded the money.

Souter, 50, who worked for 16 years in the film industry as a “leader” between set designers and set builders, said on Friday he had been unemployed in the past but never while he was working, and he doesn’t know why the agency determined he committed fraud.

When he asked the ministry to produce documents on the alleged fraud so that he could dispute the charge with pay stubs, his lawyers said the ministry reduced the amount to $ 500 and confiscated that amount from the money owed to him on his federal income tax return. Souter’s attorneys allege that Workforce Solutions never provided details of the allegations.

Souter wondered if the issue could be related to a first name change – from Juan to Tenbears – or if someone else had used their personal information to receive benefits after their vehicle was broken into.

But his lawyers say they can’t get to the bottom of it because Workforce Solutions won’t produce any cases.

“It’s like something from Franz Kafka The trialSouter’s lawyer Phillip Baca said on Friday, referring to a famous novel about a man prosecuted for a crime that was never revealed to him.

“He was accused of something,” Baca said. “But there is no proof and they refuse to produce any proof.”

Souter filed a lawsuit against Workforce Solutions in the fall, accusing the state agency of violating the public documents inspection law for failing to provide the documents it requested.

The lawsuit also asked the court to order the department to produce the records, award him damages of $ 100 per day for violating the records law, allow his claim for unemployment benefits to go go ahead and appoint a special master to audit thousands of unemployment benefit fraud cases.

Souter’s lawyers then restricted the request, asking the court to order a forensic audit of a random sample of cases.

State District Judge Matthew Wilson dismissed the motion on Friday, but postponed hearing arguments on whether Souter was entitled to damages for alleged violations of state records and whether his request for current benefits could be dealt with, saying neither side appeared ready to discuss the issues on Friday.

A spokeswoman for the department declined to comment on Souter’s case.

The New Mexico Center on Law and Poverty filed a complaint in April, accusing the department of violating the public records inspection law by failing to produce documents on the administration of requested unemployment benefits. by the organization.

New Mexico legal aid attorney Alicia Clark said on Friday she spoke to several people who were told they owed the department money over an overpayment or fraud, but were unable to obtain documentation of the claims.

Souter said he had struggled to make ends meet over the past year and even had to sell tools to get by because he couldn’t get unemployment benefits while his case was going through the system. He also did not work for most of the year.

“It’s super frustrating to have to go this far just to get your own information to try to file something that we work and pay for and that we should be eligible for,” Souter said on Friday. “It shouldn’t be that hard to get something like this.”



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SHAREHOLDER ALERT: Law Firm Pomerantz Reminds Shareholders With Losses On Their Investment In Virgin Galactic Holdings, Inc. Of Class Action And Upcoming Deadline – SPCE | 2021-06-18 | Press Releases https://berningcpa.com/shareholder-alert-law-firm-pomerantz-reminds-shareholders-with-losses-on-their-investment-in-virgin-galactic-holdings-inc-of-class-action-and-upcoming-deadline-spce-2021-06-18-press-release/ https://berningcpa.com/shareholder-alert-law-firm-pomerantz-reminds-shareholders-with-losses-on-their-investment-in-virgin-galactic-holdings-inc-of-class-action-and-upcoming-deadline-spce-2021-06-18-press-release/#respond Sat, 19 Jun 2021 00:15:00 +0000 https://berningcpa.com/shareholder-alert-law-firm-pomerantz-reminds-shareholders-with-losses-on-their-investment-in-virgin-galactic-holdings-inc-of-class-action-and-upcoming-deadline-spce-2021-06-18-press-release/ NEW YORK, NY / ACCESSWIRE / June 18, 2021 / Pomerantz LLP announces that a class action lawsuit has been filed against Virgin Galactic Holdings, Inc. (“Virgin Galactic” or the “Company”) (NYSE: SPCE) and certain of its officers. The class action suit, filed in the United States District Court for the Eastern District of New […]]]>


NEW YORK, NY / ACCESSWIRE / June 18, 2021 / Pomerantz LLP announces that a class action lawsuit has been filed against Virgin Galactic Holdings, Inc. (“Virgin Galactic” or the “Company”) (NYSE: SPCE) and certain of its officers. The class action suit, filed in the United States District Court for the Eastern District of New York, and registered as 21-cv-03070, is in the name of a group consisting of all persons and entities other than the defendants who purchased or otherwise acquired Virgin Galactic between October 26, 2019 and April 30, 2021, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants in violation of federal securities laws and to exercise remedies under sections 10 (b) and 20 (a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and rule 10b-5 promulgated thereunder, against the Company and certain of its senior officials.

If you are a shareholder who purchased Virgin Galactic securities during the Class Period, you have until July 27, 2021 to ask the court to appoint you as the primary claimant for the Class Action. A copy of the complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at newaction@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, Ext. 7980. Those inquiring by e-mail are encouraged to provide their mailing address, telephone number and the number of shares purchased.

[Click here for information about joining the class action]

Virgin Galactic is an integrated aerospace company developing manned flights for individuals and researchers in the United States

On October 25, 2019, post-commercialization, Virgin Galactic was formed through a business combination between Social Capital Hedosophia Holdings Corp. (“SCH”), a special purpose acquisition company (“SPAC”), and the then private predecessor of the Company, after which SCH changed its name to “Virgin Galactic Holdings, Inc.” and its ticker symbol at “SPCE” (the “Business Combination”).

On April 12, 2021, the SEC issued guidance stating that SPAC warrants, which are instruments that allow investors to purchase additional shares at a fixed price, may need to be classified as liabilities rather than equity. for many PSPC transactions, which were previously recorded. for fairness in these transactions.

The complaint alleges that, throughout the Class Period, the Defendants made materially false and misleading representations regarding the Company’s business, operations and compliance policies. Specifically, the Defendants made false and / or misleading statements and / or failed to disclose that: (i) for accounting purposes, SCH warrants should be treated as liabilities rather than shares; (ii) Virgin Galactic had weak disclosure controls and procedures and internal control over financial reporting; (iii) as a result, the Company incorrectly accounted for the SCH warrants that were outstanding at the time of the Business Combination; and (iv) accordingly, the Company’s public statements were materially false and misleading at all material times.

On April 30, 3021, after the close of business, Virgin Galactic announced “that it has postponed the release of its financial results for the first quarter of 2021 following the close of the US markets on Monday, May 10, 2021. Virgin Galactic will host Now a conference call to discuss the results and provide a business update that day at 2:00 p.m. PT (5:00 p.m. EST) .The Company is rescheduling its report due to the recent statement released by the [SEC] April 12, 2021 regarding the accounting treatment of warrants issued by ad hoc acquisition companies (the “SEC Statement”). The press release further stated that “After reviewing the SEC statement and consulting with its advisers, the Company restates its consolidated financial statements included in its annual report on Form 10-K for the fiscal year ended December 31, 2020. The restatement is due only to the accounting treatment of the Social Capital Hedosophia Holdings Corp. warrants. that were outstanding at the time of the Company’s business combination on October 25, 2019. The Company expects to file the restated financial statements prior to the new conference call date and estimates that it will record additional non-operating and non-operating expenses. cash for each of the fiscal years ended December 31. , 2020 and December 31, 2019. “

On this news, the Virgin Galactic share price fell $ 2.01 per share, or 9.07%, to close at $ 20.14 per share on May 3, 2021.

Pomerantz, with offices in New York, Chicago, Los Angeles and Paris, is recognized as one of the leading firms in the areas of corporate law, securities and antitrust litigation. Founded by the late Abraham L. Pomerantz, known as the Dean of the Class Actions Bar, Pomerantz was a pioneer in the field of securities class actions. Today, more than 80 years later, Pomerantz continues the tradition it established, fighting for the rights of victims of securities fraud, breach of fiduciary duty and professional misconduct. The firm has recovered numerous multi-million dollar damages on behalf of the members of the group. See www.pomerantzlaw.com

SOURCE: Pomerantz srl

See the source version on accesswire.com:

https://www.accesswire.com/652386/SHAREHOLDER-ALERT-Pomerantz-Law-Firm-Reminds-Shareholders-with-Losses-on-their-Investment-in-Virgin-Galactic-Holdings-Inc-of-Class- Action-Trial-and-Next-Deadline-SPCE



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