Your Christmas gift to the richest people in the U.S.

by philg

If you’re concerned that you haven’t spent enough on Christmas this year, the Wall Street Journal reassures you that, via your federal income tax payments, you’re subsidizing some of America’s richest private equity partners, $1,500/hour lawyers, etc. “High-Income Business Owners Escape $10,000 Tax Deduction Cap Using Path Built by States, Trump Administration” (12/6):

More than 20 states created workarounds to the limit, and New York’s law firms and private-equity firms are signing up

Here’s how it works. Normally, so-called pass-through businesses such as partnerships and S corporations don’t pay taxes themselves. Instead, they pass earnings through to their owners, who report income on individual tax returns. That subjects them to state individual income taxes—and the federal limit on deducting more than $10,000, created in the 2017 tax law.

Details vary by state, but the workaround flips that concept. The states impose taxes—often optional—on pass-through entities that are roughly equal to their owners’ state income taxes. Those taxes then get deducted before income flows to the business owners.

The laws then use tax credits or other mechanisms to absolve owners of their individual income-tax liabilities from business income. Thus, they satisfy state income-tax obligations without generating individual state income-tax deductions subject to the federal cap.

In these systems, state revenue is virtually unchanged, because the entity-level tax replaces personal income taxes. Business owners win, because every $100,000 of state taxes that go from nondeductible to deductible yields up to $37,000 in net gain on federal income-tax returns. The federal government loses money.

In New Jersey, pass-through businesses reported $1.3 billion in entity-level liability for the tax’s first year in 2020, suggesting an equivalent amount of federal deductions that might have otherwise been disallowed. In New York, more than 95,000 pass-through entities opted into the tax for 2021 before the Oct. 15 deadline.

“It’s really a slam dunk,” said Phil London, an accountant and partner emeritus at Wiss & Co. in New York, who said he has seen the owners of one business save $1.5 million and expects law and accounting firms to use the workaround. “The larger-income entities and real-estate investors and real-estate operators, they’re going to benefit from it.”

Private-equity firms have been particularly interested, said Jess Morgan, a senior manager at Ernst & Young LLP. And some businesses have restructured themselves to take maximum advantage of the benefit, she said.

After rejecting other workarounds, the Treasury Department blessed these a few days after the 2020 election, citing a footnote in a committee report from the 2017 law and a handful of entity-level taxes that predated 2017. The Trump administration, which had pressed for the $10,000 cap, offered the path out of it.

In other words, many of the richest Americans in high-tax states will be able to deduct nearly all of what would have been their state tax liability, thus keeping the subsidies flowing from workers in low-tax states and from ordinary W-2 slaves who can’t work around what was advertised as the law.

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Tyler Cowen says inflation harms the poor more

by philg

In Inflation harms the elite, the working class, or the poor? I posit that the coverage of inflation by elite-controlled media suggests that inflation harms the elite more than it harms the poor (who might never see a bill for rent, health care, food, or smartphone!).

Economist Tyler Cowen tackles the same question for Bloomberg in “Who Does Inflation Harm More, the Poor or the Rich?” (shouldn’t it be “Whom”?):

With inflation now rising faster than at any time in the last four decades, economists are debating which group suffers more from inflation, the poor or the rich. This kind of economy-wide question is not easy to answer, especially when rates of inflation have been so low in recent times and hard data are scarce. Nor is it obvious how exactly to compare the losses to the poor to the losses to wealthier groups. Nonetheless, the arguments suggest that the poor are likely to take a beating.

One major factor: The poor is the socioeconomic group that finds it hardest to purchase a home, and real estate seems to be one of the best inflation hedges. U.S. real estate prices have been on a tear for some time, including through the recent inflationary period.

Rents are rising at a rapid clip, due to the mix of rising demand and bottlenecked supply. The biggest losers there will be the poor. And if poorer people are trying to live somewhere relatively prosperous, perhaps to enjoy future economic mobility for themselves and their children, rising rent will eat up an especially large share of their incomes.

As noted above, I’m not sure it makes sense to talk about the “poor” paying rent. If they live in government-owned “public” housing, what do they care about the nominal dollars that their apartments might fetch in a market economy? It is Americans who aren’t quite poor enough to be officially “poor” who get killed by higher rents. (i.e., the chumps who work 60 hours per week to end up with a spending power just 15 percent higher than someone who doesn’t work at all and/or someone who had sex with a dentist).

Professor Cowen makes a great point about the richest of the nouveau-est riche:

Another asset class that has risen in value recently is crypto. There is no good data on who is buying crypto, but it seems likely that the poor are underrepresented here as well, if only because they have less disposable income.

The rise in crypto prices is mainly due to factors incidental to current retail price inflation, but a more general point applies: The poor hold a disproportionate share of their assets in pure cash, which has no potential for price appreciation and is hit hard in inflationary times.

He makes another good point about cars. Anyone who is at least upper middle class has a car that can last for 10 more years if necessary:

The poor do buy fewer cars than do the wealthy — but they also buy lower-quality cars, and find it harder to postpone a car purchase for a few years if they do not wish to pay a higher price. This is yet another illustration of the point that the poor can have a harder time making adjustments in an inflationary environment.

He counters my big argument, i.e., that real Americans bury themselves in debt and therefore will be delighted to pay back creditors with near-worthless dollars:

Probably the strongest argument in favor of the notion that the poor are less affected by inflation is that inflation can, under some circumstances, lower the real value of debt. If prices go up 7%, and your income goes up 7%, all of a sudden your debts — which typically are fixed in nominal value — are worth 7% less.

This mechanism is potent, but it assumes that real wages keep pace with inflation. Right now real wages are falling, and with higher inflation may continue to do so. Furthermore, many poor people roll over their debts for longer periods of time. Repaying those debts will eventually be cheaper in inflation-adjusted terms, but not anytime soon.

His conclusion is powerful. Countries that have high levels of inflation aren’t packed with cheerful poor people:

I’ve been focusing on the U.S., but elsewhere in the world the general correlation is that high inflation and high income inequality go together. Correlation is not causation, but those are not numbers helpful to anyone who wishes to argue that inflation is a path to greater income equality. Have very high levels of inflation done much for the poor in Venezuela and Zimbabwe? And if you ask which group would benefit from an improvement in living standards prompted by higher rates of investment, as might follow from a period of stability — it is the poor, not the wealthy.

Whether my original post was correct or, as seems more likely, Professor Cowen’s article, Joe the Plumber will still be living comfortably! (from Legoland Florida, just outside the restrooms)

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Should police departments hire Kyle Rittenhouse to train officers?

by philg

Now that Kyle Rittenhouse has had a month to relax after his year of being targeted for what turned out to be, at least in the eyes of the unanimous jury, a meritless prosecution, I wonder what he will do next.

Although I did not follow the trial closely, I remember that Gaige Grosskreutz testified that young Kyle did not shoot him until Mr. Grosskreutz actually pointed a gun at him (NYT):

“So when you were standing three to five feet from him with your arms up in the air, he never fired, right?” Corey Chirafisi, a defense lawyer, asked.

“Correct,” Mr. Grosskreutz answered.

“It wasn’t until you pointed your gun at him, advanced on him with your gun — now your hands down, pointed at him — that he fired, right?” Mr. Chirafisi said.

“Correct,” he said.

Imagine if 33-year-old Mohamed Noor had shown the same restraint as the 17-year-old Kyle Rittenhouse. Justine Damond would have lived to enjoy her 41st birthday and Minneapolis taxpayers wouldn’t have had to pay $20 million (George Floyd turned out to have a higher value than Ms. Damond; his survivors received $27 million from the City of Minneapolis). What if Michael T. Slager had received training from Mr. Rittenhouse? Walter Scott would be alive today and North Charleston (S.C.) taxpayers would be $6.5 million richer.

Should cities ask Kyle Rittenhouse to come in and train officers on how to recognize when it is time to shoot?

On a separate topic, the Ministry of Truth at Facebook recently lifted a ban on writing anything positive about Mr. Rittenhouse or searching for him by name (CNN), but the Ministry “will continue to remove posts that glorify the deaths involved in the Kenosha shooting.” Illustrating the limits of artificial intelligence, a Deplorable friend of a friend managed to post regarding Joseph Rosenbaum, who unwisely singled out the kid with the AR-15 as an appropriate person to attack. Background from an Arizona newspaper:

Rosenbaum had multiple convictions in Pima County, spending just over 14 years in prison. He served the first 10 years on his first rape charge. However, for the two other rape charges he only received sentences of 30 months.

WRN Investigates reported that Rosenbaum was charged by a grand jury with 11 counts of child molestation and inappropriate sexual activity around children, including anal rape. The victims were five boys ranging in age from nine to 11 years old.

According to Yahoo News, “Hours before the fatal encounter, Rosenbaum had been released from a local hospital in the wake of a suicide attempt. He had pending charges in Wisconsin for alleged domestic abuse and jumping bail at the time of his death.”

This kind of information would certainly be forbidden by the algorithms and humans at Facebook. But the Ministry of Truth did not flag the following from the above-mentioned Deplorable:

Not many people get to die doing what they love. Those who do are truly fortunate.

Jojo Rosenbaum was one of those fortunate souls. He died chasing an unwilling minor.

Readers: What do you think Kyle Rittenhouse will do next?

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Update on my friend with COVID-19

by philg

Today is the day that my friend, who woke up with a fever on Thursday, December 16, would have been tested for COVID-19 had he been willing to drive to Lynn (about a one-hour round trip).

Here’s a screen shot from last week when I logged into the Project Beacon site to see what was available at what is advertised as the highest capacity testing facility in Massachusetts (state-funded and organized by the best and brightest):

Results aren’t ready for 1-2 days, which means if he’d gotten his test today at 2:10 pm, he would have gone a full week from having symptoms to getting a test result.

(The beauty of Massachusetts is that people can go from spending hours in line at the Registry of Motor Vehicles to days waiting for an appointment at the government-organized COVID-19 testing facility and conclude “Our lives would be much better off if the size and role of government were expanded.”)

How’s the impatient patient doing? (instead of waiting for what would have been his test appointment today, he drove one hour round trip and to the closest CVS that had an at-home test kit in stock; he got a positive result the evening of 12/16)

From a previous post:

  • Day 1 of COVID for my friend: fever of 102 (chronicled in Why is it still almost impossible to schedule a COVID-19 test? (at least in Maskachusetts) Note that he had been feeling less than 100% for a few days prior, so this technically could have been considered Day 3)
  • Day 1, evening: temperature down to 100. [discussion about Regeneron]
  • Day 2, morning: Right now about 100F in each ear. Throat doesn’t hurt as much, coughing subsided. Although now that i wrote that it subsided i needed to cough. I can feel the vaccine working.
  • Day 2, afternoon: Gone. It was pretty much gone this morning.

To this we can add the following:

  • Day 3, morning: I am perfectly fine – just some snot in the nose. No temperature.
  • Me: Denial is one of the classic symptoms of Long COVID
  • Day 4, morning: A little congestion in the nose. Temperature completely normal: 98.4 in both ears.
  • Through today: still some lingering congestion, thus proving my Long Covid theory

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Photography suggestions from the Google

by philg

If you remembered to put your Canon mirrorless system in the back of the Rolls Royce for the trip to the Bal Harbour mall, here’s the Google Maps suggestion for where to stop and take pictures… Haulover Nude Beach (note camera icon pin):

From February 24, 2020 (from the same date… “Nancy Pelosi Visits San Francisco’s Chinatown Amid Coronavirus Concerns” (NBC): She said there’s no reason tourists or locals should be staying away from the area because of coronavirus concerns. “That’s what we’re trying to do today is to say everything is fine here,” Pelosi said. “Come because precautions have been taken. The city is on top of the situation.”), at the Bal Harbour Shops:

The red vehicle at top left is a Ferrari Enzo, available as a 20-year-old used car for about $3.5 million.

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Vaccine papers checks in the Cradle of Liberty

by philg

From “MAYOR WALSH SIGNS EXECUTIVE ORDER ESTABLISHING GENDER NEUTRAL RESTROOMS IN CITY HALL” (boston.gov, 2016):

“Boston is well known as ‘The Cradle of Liberty,’ and for nearly 400 years Boston has led the way in providing equal human rights for all of its citizens. Over 5 years ago, on May 5, 2010, The Boston City Council passed a Unanimous Resolution In Support of An Act Relative to Gender-Based Discrimination and Hate Crimes (S. 1687/H.1728). Because the Massachusetts Legislature has still not passed this important Human Rights Bill, Boston Mayor Marty Walsh is today taking a very courageous and important action by making two restrooms in Boston City Hall Transgender Inclusive. …

Starting January 15, the vaccinated will be more equal than the unvaccinated in the cradle of liberty. From state-sponsored media (NPR/WGBH):

Boston mayor Michelle Wu announced Monday that the city will require proof of vaccination for indoor recreational activities and will tighten the vaccine mandate for city workers.

The moves are intended to tamp down the city’s winter surge of COVID-19 cases and the threat of the emerging omicron variant.

Beginning Jan. 15, people aged 12 and up looking to patronize venues like gyms, restaurants and museums will have to present proof of at least one vaccination dose for access. The following month, everyone aged 12 and up will need to present proof of vaccination through an app, a CDC vaccination card, or photo of a vaccination card, or other official immunization record.

Children ages 5-11 will be phased into the new requirements on a slightly extended schedule and won’t have to provide proof of first vaccination doses until March 1. Then, beginning in May, children will need to show proof of full vaccination.

“This is a response that is rooted in science and public health and we need to take every available action to protect our city’s residents, businesses and institutions,” Wu said of the testing elimination.

Where did the scientist learn #Science? According to Wikipedia, while majoring in economics as an undergrad. Where did the public health expert learn medicine? At law school. What about the paranoid conspiracy theories of the Deplorables that a cabal of elites are controlling every aspect of American life? Mx. Wu attended Harvard University for both bachelor’s and law school.

What does the manufacturer of the drug that will be required for children to leave the house say about this medicine? The label: “this unapproved product… which is not an FDA-approved vaccine.”

With 95 percent of subjects, age 12 and up, having received at least one shot, is SARS-CoV-2 giving up on life in the Cradle of Liberty? NYT:

Related:

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Should Zoom let you choose the size of your pronouns on others’ screens?

by philg

“On Being a Trans Abortion Provider” (MedPage Today):

“I’m so glad it’s all women in here.”

As a family doctor and abortion provider, I hear this all the time. I know how important it is for many of the patients I care for to be seen by someone who shares their experiences. But I am not a woman.

I am trans. Getting dressed for every shift, I put on my they/them and he/him pronoun pins. Like many trans folx, I use multiple pronouns. Often these go unseen. People assume my gender based on what they’ve been taught about which bodies look like a woman and which bodies look like a man. I get it though. Patients have a lot on their minds when they come to see me. The middle of someone’s abortion doesn’t feel like the right time to talk about the difference between gender identity and gender presentation anyway.

I can make space for patients misgendering me. I believe abortion can be a very empowering experience, and for many of my patients, the solidarity between women is a part of that. People with uteruses suffer so much violence from men. Invasive exams and procedures can trigger that trauma, especially when performed by men. A great deal of what we, as medical providers, do to people in gynecological care was developed through violence, intentional abuse, and oppression of women of color. This legacy, rooted in white supremacy, is especially on my mind when providing reproductive care. So I choose not to correct the women who misgender me while voicing their appreciation for my presence out of respect for their experience and comfort.

But what I cannot make space for is being misgendered by my colleagues. It is a daily occurrence. Sometimes followed by over-apologizing, asking me to excuse the mistake to assuage their discomfort at my own expense. It happens despite the pronoun pins and Zoom name. Despite me talking about how weird it is to give myself testosterone injections. Despite the they/he in my email signature on that email I sent months ago announcing my pronouns and asking for some basic inclusion. All of the efforts I am asked to take on to become a part of a “more just” and “more diverse” workforce and movement are for naught if the very people they are trying to include are continually made to feel othered, a hassle, or forgotten.

The author’s name is Quinn Jackson. According to baby name web sites, this is roughly equally prevalent for boys and girls. Therefore, I’m not sure why Dr. Jackson believes that putting their/his name on Zoom will cue others on the call that they/he wants to be referred to with “they/them and he/him”. Zoom lets a user pick his/her/zir/their preferred pronouns for display, but the pronouns show up in a smaller font than the name. From https://support.zoom.us/hc/en-us/articles/4402698027533-Adding-and-sharing-your-pronouns

“Your pronouns will appear next to your display name in your participant video or thumbnail and next to your display name in the Participants list.”

What would work, I think, is if Zoom users could specify how prominently to display chosen pronouns. Dr. Jackson, for example, could show theirs/his in boldface 48 pt. type smack in the middle of the video image. A virtual face tattoo, essentially. Fellow participants in a Zoom call wouldn’t miss that.

(Separately, if “[p]eople with uteruses suffer so much violence from men,” as Dr. Jackson says, why is they/he injecting themselves/himself with testosterone, a hormone that leads directly to violence? (see https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3693622/ )) Shouldn’t trans folx who abhor violence refrain from using this hormone?)

Related:

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Demotivated from non-summer travel now that we’re in Florida

by philg

When we lived in Maskachusetts, this is the time of year when I would start surfing travel web sites. Maybe it would be nice to go to a beach resort, a tennis destination, a sunny mountain town out West.

Now that we’re in Florida, though, even if travel were free of coronapanic-related hassles (e.g., testing and risk of multi-week quarantine/stranding) it is tough to come up with the motivation to go anywhere that the minivan or a feeble 4-seat airplane won’t take us. If we want to be on a beach, that’s a 12-minute drive with free parking and clean restrooms on arrival. If we want to be on a world-class soft white sand beach with gentle waves, that’s on the west coast of Florida, a 2.5-hour drive away (or 3 hours by plane, after factoring in driving to the airport, updating the GPS data cards, flight planning, etc., etc.). If we want to do some sort of outdoor activity, e.g., tennis or golf, that’s walking distance from our apartment. If we want sunshine, that’s almost every day. If we need our brains rewired, the theme parks of Orlando are 2.25 hours away by minivan.

There are a lot of interesting destinations that are more accessible from MIA and FLL than from BOS. The UNESCO World Heritage sites of Bolivia, Brazil, Colombia (Cartagena at least!), etc. (101 cultural, 38 natural, and 8 mixed) Without cold, gray weather as a spur, though, it is tough to find motivation. Maybe that will change after we get burned out on all of the things that make our own corner of the world a popular year-round tourist destination. And I’m sure that will change on May 27 when the kids are done with school and it is 90 degrees every day.

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The Korean Empire Strikes Back (against Tesla)

by philg

In Volkswagen ID.4 versus Tesla Y: Did the Empire Strike Back? I wondered if some of the world’s best engineers (at least when it comes to cheating on emissions tests) could make a better car than Tesla. The answer, at least for the Audi division, turned out to be “no” (see Good news for dogs: Tesla 3 dominates Hyundai, Audi, and Polestar).

This week our government-affiliated media told us “Miss America makes history, as a Korean American from Alaska wins the title” (NPR):

“I never could have imagined in a million years that I would be Miss America, let alone that I would be Miss Alaska,” a beaming Emma Broyles told The Associated Press on Friday in a Zoom call from Connecticut, where she won the competition about 12 hours earlier.

Broyles, 20, said her grandparents immigrated from Korea to Anchorage about 50 years ago, before her mother was born.

“Although my mom is full Korean, she was born and raised right in Anchorage, Alaska,” Broyles said.

(For those who aren’t familiar with Korean language and culture, “Broyles” is a common surname for people from Changwon, capital of Gyeongsangnam-do.)

Broyles’ future plans include becoming a dermatologist and returning to Alaska to practice her profession.

This prompted me to write a derm friend, “She’ll be the nation’s second prettiest dermatologist.” Separately, I’m not sure what med school Miss America plans to attend. At the med schools with which I am familiar, there are no future dermatologists on track to make $650,000 per year in the private sector outside of a major metropolitan area. Every student describes plans to choose a low-income specialty with an emphasis on delivering care to “the underserved.”

And the non-government-run Motortrend says that Koreans are making a better car for Americans who want electric, but don’t go to the drag strip every Friday night. From “2022 Hyundai Ioniq 5 First Drive” (12/16):

The Ioniq 5 costs tens of thousands of dollars less than the Model Y, can go just about as far on a charge, charges faster, has more standard and optional features, is quieter inside, rides better, is built better, and has a better interior. The Model Y is quicker and sportier, and the Supercharger network is currently more reliable and easier to use than the non-uniform charging options for everyone else, but that and brand prestige are all the Tesla really wins on.

Hyundai has delivered a quieter EV than Tesla, however, having gone above and beyond stuffing the Ioniq 5 with noise-abating technologies. This mass-appeal electric SUV is as quiet inside as a high-dollar luxury car. Wind and road noise are kept to such a minimum you’ll easily lose track of just how fast you’re going.

Similarly, the Ioniq 5 rides considerably smoother than the Model Y and Model 3. That’s what you get in exchange for the slower, less sporty driving experience. … The quiet comfort and unhurried demeanor make it a relaxing car to drive rather than an exciting one.

More than any of its other legacy competitors, the Ioniq 5 makes you consider what you’re actually paying extra for in a Tesla, and the answer to that question just got a lot smaller.

(With 333 million Americans (and more arriving every day) trying to share a highway system built for 180 million people (U.S. population in 1960), I don’t know how many Tesla owners are able to take advantage of the sportiness. I personally will take the quiet and comfort for sitting in traffic!)

What will a RWD Hyundai cost for driving around Florida? About $37,000 for the long-range version after $7,500 in tax credit has been squeezed out of middle-class Americans who couldn’t afford to buy a fancy new car. This is $20,000 cheaper than a Tesla Y, Motortrend points out.

Will the Ioniq 5 have dog mode? Some earlier Hyundais have offered “utility mode” that may do the same thing (see Hyundai electric cars actually do have dog mode). The Ioniq 5 has the, uh, bones for it: “Heat Pump System Explained – How Heating and Cooling Works | IONIQ 5”.

As long as we’re talking drag racing, here are some photos from today’s trip to the local track:

I have been meaning to get a helmet and enter the Honda Odyssey in a race. I have also been thinking that it would be fun to offer Biden/Harris bumper stickers to the folks with American flag paint schemes on their dragsters.

Speaking of #Science-informed government, Dr. Jill Biden, M.D., wants these motorsports-loving sandhill cranes to lay off the corn dogs, deep-fried Oreos, and funnel cakes:

Circling back to the main theme… is it time for Elon Musk to retire from Tesla? Even if the company can survive and perhaps thrive against the companies that have built most of the world’s cars, Tesla won’t be nearly as much fun to run if there is real competition.

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California Karen hosts a 200,000-person mass gathering (Super Bowl in Los Angeles)

by philg

SARS-CoV-2 is a sufficiently serious enemy that the Inglewood, California schools shut down completely for more than 400 days and, even after that, reopened only in a diluted “hybrid” form (source). Karen takes COVID-19 seriously enough to deprive children of an education (albeit not seriously enough to shut down the alcohol and essential marijuana stores for adults).

What’s Karen planning for February 2022? Super Bowl LVI, which will bring more than 100,000 ticket-holders together simultaneously in the (mostly enclosed) Inglewood, CA stadium (closer to 200,000 in and around the stadium and nearby hotels if we count support staff, hospitality workers, etc.?).

A free state such as Florida or South Dakota could host a Super Bowl without hypocrisy, but how can California in general or Los Angeles County in particular? COVID-19 was serious enough to warrant closing schools and imposing vaccine papers checkpoints on gathering places, but not serious enough to refrain from pulling 200,000 people from every corner of Planet Earth into close proximity? Even if they are righteously masked in the stadium (0-11% reduction in spread!), they’re inevitably going to be partying indoors and unmasked (#BecauseEatingAndDrinking) in big crowds before and after, no?

Separately, how could the National Football League have taken the risk of scheduling the game in California? What if the #Science-following Covidcrats decide that public health is more important than mere profits and shut down the event? A lot of $5,000 tickets will have to be refunded, no?

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