Good morning. In today’s edition:

• 📝 Politicians want to eliminate taxes on tips. Economists aren’t so sure
• ⚖️ Disney’s terms-and-conditions argument
• 🚃 The train that just hangs out

… and more.

🚀⏰ Ready, Set, Go: Today’s news should be a ~4.86-minute read (1,295 words).

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“Short cuts make long delays.”

–J.R.R. Tolkien (1892-1973)

In the hotly contested 2024 presidential campaign, one issue has emerged as a rare area of agreement: workers’ tips shouldn’t be subject to federal taxes.

Former President Trump first unveiled his proposal to eliminate taxes on tips at a Nevada rally in June. And this past Saturday, Vice President Kamala Harris also endorsed tax-free tips at a campaign rally in Nevada.

• Both candidates promote the plan as a way to help alleviate financial burdens for service workers, many of whom are lower-income individuals and rely on tips for their livelihoods.

The idea of tax-free tips is also gaining bipartisan political steam in Congress. In July, Sen. Ted Cruz (R-TX) introduced the No Tax on Tips Act with the support of Nevada’s two Democratic senators, while a companion bill is also making its way through the House.

• Typically, ideas like removing taxes on tips are difficult to pass on Capitol Hill – but Congress has a golden opportunity in 2025, when it’s widely expected to approve a new tax bill following the expiration of some Trump-era tax cuts.

On the flip side: Many economists on the left and right are skeptical of eliminating taxes on tips for a wide range of reasons. They argue the plan would be difficult to regulate and administer, would incentivize businesses and workers to push harder for tips (further shifting the burden of wages onto customers), and would open a loophole for high earners to potentially shield their income from taxes.

• Opponents of eliminating taxes on tips also cite projections that show the policy would cost the US government up to $250 billion in lost tax revenue over 10 years – a tab that would either be paid for by tax increases on other groups, or simply added to America’s sizable federal deficit.

Looking ahead… VP Harris is set to unveil her first major economic plan as a presidential candidate – likely including more details on eliminating taxes for tips – in a speech later today.

📊 Flash poll: Do you support the elimination of federal taxes for workers’ tips?

• Yes
• No
• Unsure/other

While OpenAI ushered in the AI generation, and giants like Microsoft and Meta shifted strategy overnight, Apple remained largely on the sidelines. However, they recently unveiled their comprehensive AI strategy, with some calling it a ‘Trojan Horse’ that could disrupt everything.

• The situation is eerily similar to early 2007, when Apple entered the established smartphone market. Taking on established giants like Blackberry, Nokia, and Motorola – and dominated.
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🇨🇦 Toronto developers are turning a defunct airport into a small city. The $22 billion development, which aims to support ~55,000 residents, will feature playgrounds, bike paths, shops, 11 repurposed airplane hangars, and an airport runway that’s been redesigned as a pedestrian thoroughfare. The 35+ million square foot development is expected to take 30 years to complete.

🇨🇳 A Chinese firm claims it has created the world's fastest-charging EV battery. Chinese automaker Zeekr says its new EV batteries can be charged from 10% to 80% capacity in 10.5 minutes under ideal conditions, and also perform well at temperatures as low as 14°F (for comparison: a 15-minute charge of Tesla’s Model 3 covers ~50% of the car’s full range). Zeekr’s first vehicle to feature the new battery will debut next week.

🇦🇫 The Taliban’s takeover of Afghanistan passed the three-year mark yesterday. The Taliban has enacted a stricter version of Sharia law in Afghanistan after returning to power following the full withdrawal of US troops in August 2021, with new policies including banning education for girls above sixth grade, restricting freedom of religion, and enforcing public executions. Overall poverty rates have more than doubled in Afghanistan since the Taliban’s takeover, a trend analysts attribute to recent droughts, internal military conflicts, and reduced foreign funding.

The only major retailer where customer fights at night are common (Walmart) reported strong Q2 results yesterday, beating expectations on both earnings and revenue.

Why it matters: As the nation’s largest retailer, Walmart is uniquely positioned to offer insights into consumer behavior. ~90% of the US population lives within 10 miles of one of its stores.

By the numbers: The company reported quarterly revenues of ~$169 billion, a 5% YOY increase. Stores and websites drew more visits, and non-grocery sales improved.

More insights:

• Walmart revealed its overall inflation was flat for the quarter, and revenue growth came from selling more units, not charging higher prices.
• But on an item-by-item basis, prices were like an elevator – they went both up and down. Dairy, eggs, sugar, and meat rose in price, while items like pet food, apples, potatoes, strawberries, and lawn/garden items dropped in price. The company also reported “stubborn” inflation when it came to dry grocery items and processed foods.

Babe, new retail sales data just dropped. Sales in July outpaced economists’ expectations, rising 1% from the previous month, largely driven by a rebound in spending on vehicles. Excluding vehicle sales, overall retail sales rose 0.4% last month. Both of these figures outpaced inflation; prices rose 0.2% in July.

📸 Big picture: Solid retail sales data and Walmart’s strong results add to a mixed economic picture. Some companies, such as Home Depot, McDonald’s, and Disney, have sounded warnings about flagging consumer spending, while others like Chipotle, Shopify, and Sweetgreen have been cruising.

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“The notion that terms agreed to by a consumer when creating a Disney+ free trial account would forever bar that consumer’s right to a jury trial in any dispute with any Disney affiliate or subsidiary, is so outrageously unreasonable and unfair as to shock the judicial conscience.”

A wrongful death lawsuit against Disney is shining a light on the potential importance of reading the fine print for streaming services and apps. Last October, a 42-year-old New York doctor died after eating food containing allergens at a restaurant in Disney World, prompting her husband to sue the independently owned/operated restaurant and Disney itself. But according to recently filed documents, Disney is seeking to dismiss the suit and send it to arbitration because the deceased woman’s husband had previously signed up for a one-month trial of Disney+ in 2019 – a process that includes agreeing to terms that require the customer to settle any lawsuits against Disney via out-of-court arbitration.

• The entertainment giant also noted the woman’s husband agreed to a similar arbitration clause when creating an account on Disney’s website and app ahead of their visit.

👀 Looking ahead… The husband’s lawyers filed a response this month framing Disney’s reason for seeking arbitration as “preposterous,” with a court hearing on the matter scheduled for October 2.

• ☝️ The two presidential campaigns are pouring money into ads across battleground states, and the biggest target is Pennsylvania; of the $110 million spent in battleground states since Biden dropped out on July 22, over $42 million has gone to the Keystone State.

BUSINESS & MARKETS

in partnership with Dyce Games

• 💰 US markets rose across the board (S&P: +1.6%; Dow: +1.4%; Nasdaq: +2.3%). | ⚖️ The SEC has allegedly uncovered a $300 million Ponzi scheme based in Georgia.
• 📈 Chili’s same-store sales rose ~15% last quarter, boosted by its Triple Dipper and $10.99 Big Smasher meal, as well as TikTok. (TikTok + commerce: The platform is also driving a Swedish candy boom.)
• 🏡 On Saturday, most real estate agents will be subject to new commission rules; the change follows a legal settlement reached earlier this year by the National Association of Realtors in regards to commissions. Here’s what you need to know.

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SPORTS, MEDIA & ENTERTAINMENT

• 🚨 Five people, including two doctors, were charged in connection with actor Matthew Perry's death from a ketamine overdose last year.
• ⚽ The US men’s national soccer team has reportedly hired Mauricio Pochettino as its new head coach; Pochettino was previously the head coach at Tottenham, Chelsea, and Paris Saint-Germain.
• 💰 DraftKings is reversing its plan to introduce a surcharge for consumers in states with high sports-betting taxes; the move came after rival FanDuel’s parent company reported better-than-expected earnings and said it won’t add similar surcharges.

SCIENCE, SPACE & EMERGING TECH

in partnership with Mira

• 🤖🖼️ X released an upgraded version of its Grok AI chatbot that can now generate images; some users report Grok has relatively few limitations on its images compared to competitors. | 🤖🏫 High school students who use generative AI tools like GPT-4o to prepare for math exams perform worse on the tests – where they can't use AI – than students who didn't use the tools at all, per a new UPenn Wharton study.
• 🧠🗣️ A text-to-speech brain implant from startup Blackrock Neurotech allowed a 45-year-old ALS patient to communicate with others for the first time in years. | 🧠 Roughly 1 in 5 people in a coma are aware of their surroundings but unable to communicate, per a new study published in the New England Journal of Medicine.
• 🚀 Lockheed Martin agreed to buy spacecraft manufacturer Terran Orbital at an enterprise valuation of ~$450 million, in a deal that takes the company private.

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MISCELLANEOUS

• 🎓 Columbia President Minouche Shafik announced her resignation late Wednesday; the move follows months of pushback over her handling of pro-Palestinian demonstrations on campus. | 🧑‍⚖️ A Detroit judge who ordered a sleeping teenager into jail clothes and handcuffs on a field trip to his courtroom has been temporarily suspended and will undergo “necessary training.”
• 🗣️ Vice presidential debate: Sen. JD Vance (R-OH) and Minnesota Gov. Tim Walz (D) agreed to face off at an event hosted by CBS News on October 1. | ⚖️ Former President Trump's legal team requested the judge in his New York hush money case delay the sentencing until after the November presidential election.
• 💊 The White House announced an agreement with drugmakers to lower prices on 10 of the costliest prescription drugs under Medicare as part of landmark negotiations; the discounts, ranging from 38%-79%, are projected to save Medicare ~$6 billion in the first year.

CLICKBAIT

• 🤔 Warren Buffett did something curious with his Apple stock holding.

🎢 Stat of the Day: Yesterday, Six Flags unveiled plans for a new record-setting roller coaster at its Chicago-area theme park. The Wrath of Rakshasa will force riders to stare down a "96-degree, beyond-vertical drop" before plummeting down 171 feet – perfect for those who love feeling their stomach up by their ears. Riders will also experience five gravity-defying inversions at a top speed of 67 MPH. Once the Wrath of Rakshasa debuts in 2025, it’ll boast "the world's steepest drop with the most inversions on a dive coaster," according to Six Flags.

🤔 Did You Know? The Wuppertal Schwebebahn, a suspension railway in Germany that hangs upside down instead of gliding above a track, first opened in 1901. Today, 124 years later, it’s one of the only remaining suspension railways in the world, carrying ~85,000 passengers/day and continuing to just hang out.

📰 Worth a Read: A Drunken Evening, a Rented Yacht: The Real Story of the Nord Stream Pipeline Sabotage → (WSJ)

We bring you the most unusual, off-the-wall and occasionally laugh-out-loud headlines from this week.

• Flavor Flav offers Jordan Chiles a bronze clock necklace as medal replacement → (NBC4 Los Angeles)
• Dog spooked by thunder runs 20 miles from home → (UPI)
• Alaska Airlines flight makes sudden diversion after pilot says he's not certified to land → (Fox Business)
• Parents and Gen Alpha kids are having unintelligible convos because of ‘brainrot’ language → (NBC News)
• Dodgers star Mookie Betts refused to stay at a haunted hotel in Milwaukee (again) → (USA Today)

Andy Walker is a former competitive swimmer who suffered a spinal injury from a dangerous dive in his late twenties. Now 47, and paralyzed from the neck down, Andy spends his time taking on ambitious charity challenges to raise money for those in need.

🚲 Off-roading... Earlier this month, Andy and his team set off on a 1,000-mile journey through the UK on a personalized quad bike that he controls with his chin. 

• The funds raised by Andy's trek will be donated to the Rob Burrow Centre for Motor Neurone Disease, which helps people affected by the incurable brain disease.

Our weekly news quiz just dropped. See how your news superpowers stack up against our team.

Below are three lists of ingredients. Your job is give us the completed dish they make.

☝️ Recipe #1:

• Cherry tomatoes
• Salt & pepper
• Cream cheese
• Mayo
• Onion powder
• Cheddar cheese
• Calabrian peppers
• Basil
• Butter
• Green onions

✌️ Recipe #2:

• Flour
• Sugar
• Salt
• Butter
• Water
• Cocoa powder
• Buttermilk
• Eggs
• Vanilla extract
• Baking soda
• Milk
• Powdered sugar
• Pecans

3️⃣ Recipe #3:

• Buckwheat flower
• Flour
• Sugar
• Salt
• Baking soda
• Egg
• Buttermilk
• Butter

☝️ Recipe #1: Tomato pie dip

✌️ Recipe #2: Texas sheet cake

3️⃣ Recipe #3: Buckwheat pancakes