How the U.S. Tax System Works: Infographic

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The US tax system is one of the most complex in the world. The tax code is 6,871 pages long according to one estimate. When all the guidelines and regulations are included it goes to 75,000 pages !

The reason for the complexity is the tax code constantly gets updated with all kinds of exclusions, deductions, etc. For example, buying a home allows for certain tax benefit if some conditions are met. I came across the following infographic that shows how the US tax system works:

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How the U.S. Tax System Works

How the U.S. Tax System Works, courtesy of Peter G. Peterson Foundation

Quickpost: Which Listed Company is Europe’s Most Valuable ?

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The most valuable listed company in Europe is French luxury giant LVMH Moet Hennessy Louis Vuitton SA (LVMUY). At the end of 2022, its market capitalization stood at $342.0 billion Euros. In US dollar terms, it was $426.0 billion as of close of Jan 20, 2023.

Below is a short except from a recent journal article:

Some original founders have served investors well. Since LVMH went public in the 1980s, the stock has generated average total returns of 17% a year, and it is now Europe’s most valuable listed company. Richemont’s long-term record is also strong, with 14% returns. Prada is the exception: Its almost 12-year run as a public company has been poor, returning only 3% annually.

Source: Luxury Tycoons Leave Big Shoes to Fill, WSJ

Luxury stocks have indeed produced excellent returns over the long run.

Among the top listed European firms in terms of market capitalization, three luxury companies take a spot as shown in the chart below. The most valuable listed firms on Euronext Stock Exchange as of Dec, 2022 (in billion Euros):

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Source: Statista

Referenced firms:

Disclosure: No positions

An Update on Chile Dividend Withholding Tax

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The Dividend Withholding Tax rate for foreign investors in Chilean equities used to be 35%. This rate has been reduced to 23.9041123%. This is a welcome news for ADR holders.

Below is the YTD returns of Chilean ADRs trading on the US exchanges:

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Source: BNY Mellon

Last year Lithium miner Soc. Quimica y Minera de Chile (SQM) had an astonishing run. It remains to be seen if this year also will be great for SQM investors.

Disclosure: Long BCH