Why billionaires are asking the government to take their bills
The Hustle

Why billionaires are asking the government to take their bills

Today, defending soccer champs act like they don’t care and private equity serves up a new acquisition medium-rare, but first…
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Billionaires are practically begging to pay more taxes in a new open letter

American billionaires know where to find the cash to correct climate change, the public infrastructure crisis, and other pressing societal problems: their own pockets. 

Now, in an open letter published on Medium, they’re asking the federal government to take more of their money.

On Monday, George Soros, Abigail Disney, Facebook co-founder Chris Hughes and several other members of the illustrious “3 Comma Club” released an open letter on Medium pleading for “a moderate wealth tax” on the richest 1/10 of 1 percent of Americans.

Billionaires believe America is in trouble 

The letter proposes a “wealth tax” that would be levied against any American household with more than $50m (this is NOT an income tax). 

Based on this plan — which resembles proposals made by Democratic presidential candidates Elizabeth Warren, Pete Buttigieg and Beto O’Rourke — roughly 75k families would owe 2 cents for every dollar they have over $50m.

Hughes, Soros and company suggest the wealth tax could help: (1) solve climate change; (2) improve America’s economy; (3) improve public health; (4) reduce income inequality; (5) strengthen democracy; (6) and boost patriotism.           

Warren Buffett, O.G. tax fan

Billionaires have made similar requests before: Warren Buffett asked for higher taxes on Americans who made more than $1 million in 2011 (and again in 2015), and Bill Gates did it in 2018

Despite support from President Barack Obama, the so-called “Buffett Rule” was never passed. And Buffett had to give his money away. He donated $3.4 billion in Berkshire Hathaway stock last year.  

Will pay 4 change

Defending African soccer champs go on a mini-strike to bargain for bigger bonuses

Soccer is a big deal in Cameroon: The men’s national team is the defending continental champions in this month’s African Cup of Nations (AFCON) tournament.

But soccer isn’t just a game in Cameroon; it’s serious work. So serious, in fact, that Cameroonian players went on strike in the middle of this year’s AFCON tournament to demand bigger bonuses.

The game-behind-the-game in African soccer

Last week, players on the Cameroonian national soccer team refused to board their flight to Egypt after they received bonuses of $34k, half of what they initially demanded.

After Cameroon’s ministry of sport agreed to give the players additional bonuses of $8.7k, they agreed to fly to Egypt.

It’s a successful way to leverage limelight

The crafty Cameroonian soccer stars weren’t the only ones thinking about striking in this AFCON tourney: Members of Zimbabwe’s team threatened to boycott their first game because they hadn’t been paid.

Game-time disputes have become increasingly common for a simple reason: They’re effective.

Usually, governments are slow to pay players. But when players threaten to make their countries look stupid during international tournaments, they pay faster: In the 2014 World Cup in Brazil, Ghana’s government flew out an emergency $3m in cash to pay player bonuses.

» You gotta pay to play
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NYC rental racket shows Airbnb makes life hard for renters in more ways than one

A group of 9 people rigged up a simple New York City rental scheme that made $5m in revenue by booking illegal Airbnb rentals, reveals a recent Wired report.

The success of this rental racket shows that Airbnb can make life harder for renters in any kind of market.

A stealthy scheme made $5m in a rigid rental market

New York’s notoriously strict rental rules are supposed to ban owners from building short-term rental empires. But, between 2015 and 2019, this rental racket did just that, booking 64k guests in 24k rooms.

The “unlawful hotel operation” flew under the radar of both Airbnb and New York City officials for years using fake host names, highlighting how easy — and how lucrative — it can be to break the rental rules.

In New York, Airbnbs — illegal and otherwise — have directly accounted for a $380 increase in annual rental costs.

Unregulated rental markets are ALSO getting rocked

The Airbn-boom affects different cities in different ways. 

In Canada, where rental regulation is generally more loose, 1.5% of the rental supply in the entire country has been devoured by Airbnb.

In Montreal, prices have risen so much that long-term tenants are getting evicted from homes by developers who are jacking up rental rates for short-term rentals.


Sizzling $650m Del Frisco’s deal proves private equity firms love steak

The Connecticut-based private equity giant L Catterton agreed yesterday to buy Del Frisco’s Restaurant Group — a steakhouse chain with 78 restaurants — for $650m in cash, Axios reports.

At first bite, the multimillion-dollar deal — an 18.9% premium over the steak-maker’s closing price as of last Friday — seems like a strange move for a massive private equity company…

But private equity firms are cash-craving carnivores

Luxury meat markets like Del Frisco’s offer private equity companies a mouthwatering combination: Stable revenue and cash.

“Restaurant groups, with their cookie cutter scalability and strong cash-generation, work well for private equity,” investment banker Peter Hemington explained to the Financial Times

Since slinging sizzling steaks is a proven business model, buying steakhouses makes for low-risk investments that can balance out the riskier pieces of a private equity portfolio. 

Del Frisco’s isn’t the only sirloin on the private equity plate

The Boston-based steakhouse chain Smith & Wollensky is owned by the private equity firm Bunker Hill Capital. 

Other famous steak chains like Ruth’s Chris Steakhouse have been flipped by private equity firms in the past.

» Well done

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