When 1 + 1 is not equals 2

We finally answer a question that has been bugging us for 5 years.

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We continue our work towards building the system to de-platform all systems, a system so secret that it is the most secret-y secret of all of secret-dom and we are its sole witness! It’s a heavy burden,  but nobody must know the mystery of the secret platform.

One problem that irritated us for 5 years is this simple line item over here picked up from JP Morgan’s Annual Report.

So right from the start, one is faced with an issue: Which figure is correct? Is JP Morgan’s total revenues $115.6 billion or $118.7 billion?

(Note: When it comes to consolidating stuff, we are super pedantic. Note if you ask Mitre, they will probably answer that there is no difference between $118.6 billion and $115.6 billion. )

We finally understand the answer and it has to with a function that Governments, especially Old-School-“tax and spend” Democrats excelled in, which was to tax everybody out of every last dime, nickel and penny.

To answer this question, we need to consider the following case.

(A) Suppose you are the Count Dracula part of the Vampire Squid bank and you make money by “gouging the eye-balls” of your a Muppet* Investment Fund, which you earned $1 billion. The tax rate for this sort of income is 30%, which is the standard corporate tax rate.

(Note: Per Disney, the Muppets includes negative depictions and/or mistreatment of people or cultures )

(B) Another unit is part of the Buffy The Vampire Slayer part of the sameb bank and they earn $500 million through the interest income from buying up $5 billion of municipal bonds issued by a border town to fund the next generation “Re-education camps“, for those who refuse to believe that every child has a biological mother and father. The tax rate on this sort of income is 0%.

Now if you compare these two revenues streams side by side, it may appear that the Count Dracula part has greater revenue. However, that revenue is actually subject to a higher tax, so in effect, the contribution to net income is reduced because of this higher tax.

So how can the manager in the Buffy division get the same bonus for the manager in the Dracula division because of this different basis in reporting revenue?

This is solved by the magical: “Managed basis” form of the presentation.

This is illustrated in the figure below

 

So you see because the Buffy division revenue has 0% tax rate, effectively it saved $214 million of hypothetical tax expenses at 30% because of this equation:

Managed Basis Multiplier* = [ Standard Tax Rate – Tax On Rate on Income ]/[1 – Standard Tax Rate] = [30% -0%]/[1-30%] = 3/7 = 0.43

Tax Credit = Managed Basis Multiplier * Revenue = 500 * 0.43 = 214m

*Think of this as dividing a stick into 10 equal parts. If 7/10 of the stick is equal to $500m, which is essentially the after-tax revenue on a tax rate of 30%, then length of the entire stick is 10/7 * $500m = ( 3/7 + 1) . The 3/7 part is the tax credit .

**Per Bill Gates woke-funded anti Mathematics drive because that is white supremacy which is just another form of cultural colonization. The idea to be able to formulate a statement in a mathematical basis allows for fake news to be discovered quite easily. I remember when I was 7 years old, my teacher in primary school gave us all a couple of coins and taught us how many coins it took to make 1 Ringgit – a whopping 100 sen. She also introduced the concept of the mythical quarter penny, a coin so rare, that it ranks next to the secret platform in secret-dom. 

So that explains how the managed basis revenue for Buffy works out to $714m.

But in order for this to work, we must be able to apply a single tax rate of 30% and arrive at the same After Tax income of (Revenue – Tax Expense) =  ($1000 – $300) + ($500- 0) =1.2 billion.

And walla it works, as shown below

So walla, $1.71 billion in Tax Equivalent basis revenue is equivalent to $1.5 billion in accounting revenue, taxed at different rates, for the purposes of determining after tax income! 

So with a Democrat-Socialist Government in the White House, expect much more hacking at the US Tax Code which will create more cases of the corporate revenues income taxed at different rates. Maybe the interest income of bonds issued by Woke companies will be taxed at 0% and the bonds issued by non-Woke companies at 99.99999%. And if your company claims Election Fraud, then the entire proceeds of the bond will go to Antifa / BLM!

(Darn: I gave them an idea!)

So now to answer the original question, what is the Revenue of JP Morgan : $115.6 billion or $118.7 billion.

A figure of $118.7 billion allows for comparison across segments, but will distort the cases where the segment carries a lot of municipal bonds and the bond yields are not adjusted to a Tax Equivalent basis. If they are, then $118.7 billion sounds correct because it allows for a single tax rate to be applied at the consolidation phase.  But the question arises because while this is disclosed at the segment level, in other parts of the annual report, the figure used to break down may refer to the $115.6 billion so it is important to be able to adjust from 1 figure to another, depending on the context required and the tax-code or future tax-code in place.

 

That is all I want to say today.

 

De-platform today.

De-platform tomorrow.

De-platform Forever.


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