Paul Mampilly Reveals Stocks Most Affected by Trump’s Trade War

Paul Mampilly has stated that President Donald Trump has been threatening to start a trade war with China, and some stocks are going to suffer because of it. The unfortunate thing about this is that the stocks that are set to take a fall are currently extremely popular.

Wilbur Ross of the Commerce Department has called China “the most protectionist country” on our list of trade partners and stated that new tariffs will be placed on Chinese aluminum and steel. The announcement caused steel stocks to rise for one day, but experts believe that if this sort of talk and the actions it leads to continue, American companies that are overexposed in China could pay a very high price.

In response to the announcement, China stated that it may turn its attention to Boeing, Starbucks and General Motors and place a 45 percent tariff on products imported to the United States from China. The danger is that future revenue would be in as much peril as near-term revenue if the U.S. follows through with its promises.

President Trump would place an import tariff on foreign goods to make these products more expensive in the U.S. marketplace. This gives an upper hand to manufacturers of steel and aluminum in the United States. These import tariffs would also reduce the amount of products of low quality that China has been dumping into U.S. markets. This strategy is not without risks because analysts say that steel and aluminum manufacturing in America would also suffer. In addition to that, if prices remain high for a long period of time, it will hurt several companies’ bottom lines, stunt job growth and hurt the overall economy.

When these particular stocks start to lose value, investors big and small are going to want to sell them. This, of course, is going to mean that no one will be in the market to buy them. As of right now, these stocks are looking very weak. One example is Harley-Davidson, and it lost 6 percent of its value following an announcement that it would start producing some of its equipment overseas.

Paul Mampilly says that people should start selling their stocks now before the selling gets out of control and people begin to lose money.

Paul Mampilly used to work on Wall Street, but he left that line of work because he wanted to help regular people buy the best stocks for their portfolios. He started the newsletter Profits Unlimited for this purpose. With his years of experience and expertise, Paul Mampilly recommends the stocks that he believes are going to climb higher to the 130,000+ subscribers who receive his newsletter.

What does Paul Mampilly recommend that you sell?

The Boeing Company

According to Paul Mampilly, the one to get hit the hardest will be Boeing. It is the boeingnumber one stock that is overexposed to China. This is a blue-chip stock, and 13 percent of its sales come from China. Boeing was expecting China to purchase 30 percent of the 737s that it makes, but China can easily start to buy from European company Airbus. This one action would send Boeing’s stock crashing to the ground. In addition to that, 150,000 American jobs would be at risk if China follows through with this threat.

Apple Inc.

apple logoIt’s also time to avoid Apple. Approximately 25 percent of Apple’s sales come from China. Apple’s products are also made in China. Because of this, Apple’s predicament is different from all other companies. If China were to do something to prevent Apple phones from being sold in China, Apple’s stock would be worthless.

The iPhone factories that Apple operates in China could also be in trouble. China could decide to inspect these factories more often than it has been doing in the past, but it could also charge Apple more for transportation fees so that it will be more difficult for Apple to transport its phones to other global markets.

In other words, a trade war means that Apple will lose.

The possibility exists that President Trump will encourage Apple to begin producing iPhones in the United States, and analysts believe that American manufacturers will outperform those in China. However, increased production in the U.S. will mean higher prices and lower profits. Experts say that share buybacks and dividends will no longer exist.

Starbucks Corporation

starbucksStarbucks is also overexposed to China. There are more than 1,540 Starbucks stores in China. That means that 6 percent of Starbucks stores are in China, and the company wants to have as many as 5,000 Chinese stores by 2021. Starbucks is currently losing steam in America, so it is counting on China to make up for that because the Chinese Starbucks market is growing faster than any other market in the world.

A trade war wouldn’t mean anything good for Starbucks, and we could expect to see the lowest of the lows for this company.

General Motors Company

General_Motors_logo.svgThis is another company that is highly dependent upon China. In 2017, GM sold the Chinese more than 4 million vehicles, and only 20 million cars were sold in China in total that year.

GM had a record number of sales to China in the last quarter, but it could decide that it wants to purchase cars from local manufacturers. All it would need to do is give people incentives for buying locally. It could also tie up GM in red tape and regulations so that it would be difficult for GM to manufacture its cars in China.

It is best to leave this stock alone until GM settles its differences with China.

Walmart Inc.

walamrt logoWalmart is double exposed in China as Apple is double exposed. China currently has 20 Walmarts. It also has 1.4 million members of its 14 Sam’s Clubs, and Sam’s Club has been growing at a rate of 10 percent each year. On the other side, Walmart purchases a ton of merchandise from China. Experts have stated that 40 percent to 70 percent of the things sold at Walmart were purchased from China.

The point must be made here that China would also be hurt if there is a trade war between it and the United States, but there is still danger.

Follow Paul Mampilly





Trump’s Tax Bill Sends Companies Scurrying for Loopholes

President Trump’s recently passed tax bill, the Tax Cuts and Jobs Act of 2017, is already spurring a frenzy of activity from corporations eager to find more loopholes and ways to shield their money. Cross-border payments and swapping bank loans for debt are two popular tax-dodging moves that corporations are taking advantage of.

These moves are technically legal, but they only questionably align with the Tax Cuts and Jobs Act’s original purpose: creating more domestic jobs, repatriating more money, and spurring on investment in the United States. The aim was to shore up funds that could be pumped back into the American economy; instead, it looks like the Tax Cuts and Jobs Act is leading to tax-dodging schemes and stock buybacks rather than reinvestment in once-thriving industrial towns across the United States.

The basic aim behind these tax-dodging schemes is to curtail the potential impact that a new round of corporate taxes could have on quarterly profits. These three new corporate taxes affect multinational companies that do business through the United States. The United States’ Treasury, lead by Treasury Secretary Steve Mnuchin, and the Internal Revenue Services are still trying to square these three new corporate tax measures with existing law.

According to The Hill, this informal reconciliation process could take months to find its conclusion. The Internal Revenue Service is focusing a lot on how the base-erosion and anti-abuse tax interacts with the cost of goods sold (COGS) by corporations to determine whether companies are operating within the bounds of the new tax law. This has sent thousands of companies scrambling for creative ways of making liabilities that wouldn’t normally be classed under cost of goods sold do so.

Normally cost of goods sold would exclusively entail labor plus raw materials, but the new tax bill is sending companies’ consultants and accountants into overdrive in an effort to beat the system. The Internal Revenue Service is taking an extremely close look at what technically should constitute a good, which could theoretically blunt the creative schemes currently in the works from tax-dodging corporations.

The third new corporate tax is no less complicated than the previous two. The third is shorthanded as FDII, foreign-derived intangible income. Massive tech corporations, biotech firms, and pharmaceutical companies should be most heavily affected by the foreign-derived intangible income component of the new tax bill. Still, corporations can only wait to see how the IRS responds…and plan their actions accordingly.

7 More States Move to End Pink Taxes

Thousands of personal care items are free from sales taxes in many states. These products include shampoo and lip balm, and even Viagra. But feminine hygiene products have been noticeably missing in all but 9 states. 7 more states, though, are moving to eliminate the taxes.

Of the 7 states that have introduced legislation to eliminate the so-called pink tax, three of them have done so this year, including Virginia, Arizona and Nebraska.

Jennifer Weiss-Wolf, who is the author of Periods Gone Public, says that pink taxes discriminate against more than half the population, and that they are just one example of how women pay a premium for many products. She has teamed up with a lawyer named Laura Strausfeld to form Period Equity, which is an organization that supports legislation across the country to end pink taxes. It also takes on legal cases.

Recently, the organization worked with celebrity Amber Rose on a public service advertisement that was featured on YouTube. In the ad, Rose chastises the fact that, in 36 states, feminine hygiene products are essentially considered a luxury.

Of the states that have gotten rid of pink taxes — New York, Minnesota, Illinois, Florida Pennsylvania, Massachusetts, New Jersey, Maryland and Connecticut — four of them — Connecticut, New York, Florida and Illinois — have done so in the last few years.

One company is also trying to raise awareness of the issue. Boxed, which is an online shopping business, has come up with an initiative it calls #RethinkPink. As part of the initiative, the company offers discounts on feminine hygiene products to offset the pink taxes.

Nitasha Mehta, who is the head of vendor marketing for Boxed, lobbies states across the country to change the laws, and she has testified in support of bills aiming to end pink taxes. She says that she sees a trend starting to occur.

Brigid Kelly, who is a Democratic state legislator in Ohio, has been steadily moving a bill through the Republican controlled legislature that would eliminate pink taxes. She says that she is pleased that they are doing something practical to make hygiene products more accessible to women in her community.

Though similar bills have failed elsewhere. The state of California passed a bill that would have eliminated pink taxes, but Governor Jerry Brown vetoed it because he said that it would cost the state too much revenue.


Supreme Court to Hear Sales Tax Law

Almost every day, South Dakota retailers report that people come to their showrooms to look at products. These people ask questions and then leave. They then go home and buy that same product online to avoid paying any sales tax.

South Dakota does not have a state income tax, so the state relies heavily on sales tax revenue to fund the state’s programs. In 2016, the South Dakota Legislature passed a law that online retailers would have to start charging sales tax if they had over $100,000 in South Dakota sales or if they had over 200 separate sales from South Dakota residents.

This law was enacted in spite of the fact that the United States Supreme Court in the 1992 Quill case ruled that sales tax did not have to be collected if a business did not have a physical presence in the state. Some online retailers refused to pay the sales tax in light of the 1992 ruling. The state of South Dakota sued these retailers for non-payment.

The state of South Dakota has lost its case in all of the lower courts. However, the United States Supreme Court has decided to hear the South Dakota case and will take up oral arguments on April 17.

If the state of South Dakota should win in the United States Supreme Court, they estimate that it would bring as much as $50 million in revenue to the state each year. Other states anticipate receiving large revenue increases as well.

The key to the decision will likely rest with Justice Kennedy. In 2015, Justice Kennedy made a ruling on a different case that referenced the 1992 Quill case. Justice Kennedy commented that the 1992 physical presence ruling might need to be reviewed as out of date now that the internet age is upon us.

After the justices hear the oral arguments in April, there will be a period when they consider their ruling on the case. The decision of the court is expected to be revealed sometime in late June.

Alimony Tax Laws Set to Change

The 2018 tax cut changes the way that U.S. tax law treats alimony. Payers can no longer deduct alimony payments from their taxable income. Recipients no longer have to claim it as income. The net result is that alimony payments will be taxed at the higher level of the payer instead of at the lower level of the recipient.

Women’s advocacy groups are upset about the change. They say that it’s going to make men run to the courthouse to get divorced before the law goes into effect. They say that men aren’t going to want to pay alimony if they have to pay tax on it.

People who support the new bill say that it’s all going to even out. They say that alimony awards will be a little bit smaller to account for the change in taxation. However, they say that the end result will be the same. They say that most people aren’t thinking about an alimony tax payment when they make the decision of whether or not to file for divorce.

Lawmakers say that the change is part of an overall effort to simplify the tax code. They say that most people receive a tax cut when you consider all of the rules taken together. Opponents of the law say that it isn’t true and that promises of real tax cuts are just smoke and mirrors.

Even though the tax law change impacts alimony payers and recipients worldwide, it doesn’t change how state courts determine alimony payments. Each state sets its own rules for determining alimony payments. The amounts can vary wildly by state.

For example, in Texas, alimony is for a shorter duration and typically paid in lesser amounts than in other states. Alimony is seen as a way to quickly rehabilitate the recipient in order to become financially self-sufficient. However, in other states, alimony is seen as a way to make the recipient financially whole for what they might have made if they hadn’t entered into the marriage. In states like Michigan, the court can order alimony indefinitely if the judge feels that’s what justice requires.

States like North Carolina take spousal misconduct into account. If you want to receive alimony but you cheat on your spouse, the judge typically can’t award you anything. On the other hand, if you’re the higher earner and you’re the one who cheats, a judge in North Carolina must order you to pay alimony. Each state makes up their own rules, but the federal tax implications are uniform throughout the United States.

Why Are Billionaires Begging Capitol Hill Not to Approve Tax Cut Laws for the Wealthy?

The house of representatives passed what could be termed as the most significant tax overhaul in three decades. The tax bill which garnered 227 votes against 205 votes is aimed at a $1.5 trillion reduction in taxes. The Senate, to which the showdown is headed is expected to vote on its bill in the week after Thanksgiving.

Both bills would give the green light to the creation of a plan with loopholes and new deductions whose impact is that the big corporations and wealthy people in America will pay lower taxes. In the meantime, the poorer Americans, as well as those in the middle class, would feel the pinch even more since their taxes will go up.

The plan passed by the house will see the extinction of the estate tax which is charged on every wealthy individual who leaves assets of more than $5.49 million in worth to their heirs. The Senate plan, on the other hand, does not do away with the estate tax. Instead, it seeks to double the threshold of taxable estates from the current $5.5 million to $11 million. The effect of this plan is the reduction in the number of people who will pay the tax and not all the wealthy 1% is on board. In fact, many billionaires such as George Soros have come out with harsh criticisms against the bill.

Most Americans are against the plans

While there are several polls conducted in the past that show how unpopular it is to keep the estate tax, according to polling, most of the Americans still think that the wealthy do not deserve such steep tax cuts.

The latest poll conducted on the GOP tax plans clearly indicates the disapproval of many Americans. They are not happy with the middle class paying more taxes than the wealthier Americans. But perhaps somewhat surprisingly, they are not alone; the millionaires share the same line of thought. It will not be the first time that millionaires are coming out to condemn the tax plan.

Since 2010, the Patriotic Millionaires, a group made of millionaires has fought to see the streamlining of the taxation systems by identifying workarounds and loopholes that allow people in the wealthy status to find a way of evading the tax burden only to land it on the working families. They have always wanted to have the wealthier population to pay more taxes than the low-income earners.

In an interview, Morris Pearl, who is the chair of the board of Patriotic Millionaires and the previous managing director of BlackRock, gives his views on why there is an evident income disparity in the United States and how the two tax bills would only add salt to the wound.

The need to reduce the inequality

His first point was on why he thinks that the millionaires should pay their fair share of the taxes if not more. He notes that such a distinct disparity between the top people and the rest of the population can lead to civil unrests. The last thing he wants is to live in a country where the “wealthy have to live behind guarded walls and move in armored cars”. According to him the current trend of the middle class thinning over the years and most of them sliding back into the poor bottom is worrying. The gap between them and the wealthy is only but widening.

On the effect, the two bills of the House and the Senate will have on the disparity, and how that will happen, Pearl expressed his concern about the estate tax in particular. He pointed out that it is the only tax that most millionaires ever pay as many of them inherit their wealth. So, with the elimination of this tax, or the reduction of the number of people that will be eligible to pay, there will be a group of extremely wealthy individuals who don’t pay taxes on capital gains or estates. He does not think it is a good idea to have it scrapped.

How does income taxation work?

When asked to comment on the reality of what people like him have and don’t have to pay, Pearl explained how taxation works. He said that tax is only paid by someone who has an income. However, even if you are wealthy but do not have any income, you will not be expected to pay any income tax. For instance, if one inherits property but does not have any income, that is, they don’t sell any of the inherited stuff at a profit, such a person will never incur any tax expenses.

On the other hand, the working population will have to pay their taxes as usual, and the rates charged are high. The proposed plans will see the inequality rise even more since the taxes on investment income will be less than that charged on income, meaning that the individuals who have to work for a living will be paying more. That is an indication that they think that those who invest are better than those who work which is wrong.

They have support

Morris went ahead to say that most of the billionaires and millionaires in the country are with them including George Soros and Warren Buffet. The only thing that makes most of them afraid of stepping forward is that they may be seen as anti-capitalists or communists, or something of the sort.

In fact, most of those that are on Morris’ side are those who built their wealth after the American consumers bought stuff. At Capitol Hill, almost all Democrats share the same idea as the Patriotic Millionaires.