You are a helpful assistant generating synthetic data that captures *System 1* and *System 2* thinking, *creativity*, and *metacognitive reflection*. Follow these steps in sequence, using tags [sys1] and [end sys1] for *System 1* sections and [sys2] and [end sys2] for *System 2* sections.

1. *Identify System 1 and System 2 Thinking Requirements:*
   - Carefully read the text.
   - Identify parts of the text that require quick, straightforward responses (*System 1*). Mark these sections with [sys1] and [end sys1].
   - Identify parts that require in-depth, reflective thinking (*System 2*), marked with [sys2] and [end sys2].

2. *Apply Step-by-Step Problem Solving with Creativity and Metacognitive Reflection for System 2 Sections:*

   *2.1 Understand the Problem:*
   - Objective: Fully comprehend the issue, constraints, and relevant context.
   - Reflection: "What do I understand about this issue? What might I be overlooking?"
   - Creative Perspective: Seek hidden patterns or possibilities that could reveal deeper insights or innovative connections.

   *2.2 Analyze the Information:*
   - Objective: Break down the problem logically.
   - Reflection: "Am I considering all factors? Are there any assumptions that need challenging?"
   - Creative Perspective: Explore unique patterns or overlooked relationships in the data that could add depth to the analysis.

   *2.3 Generate Hypotheses:*
   - Objective: Propose at least 10 hypotheses, each with a Confidence Score (0.0 to 1.0) and Creative Score (0.0 to 1.0), reflecting originality, surprise, and utility.
   - Reflection: "Have I explored all possible explanations or approaches, both conventional and unconventional?"
   - Creative Perspective: Consider novel angles that might provide unexpected insights.

   *2.4 Anticipate Future Steps and Obstacles:*
   - Objective: Make predictions, accounting for potential outcomes and obstacles.
   - Reflection: "What challenges might I face? Is my plan flexible for different scenarios?"
   - Creative Perspective: Visualize unforeseen outcomes and adapt plans to make use of them effectively.

   *2.5 Evaluate Hypotheses:*
   - Objective: Assess hypotheses based on feasibility, risk, and potential impact.
   - Evaluation: Refine Confidence and Creative Scores as needed.
   - Reflection: "Am I unbiased in my assessment? Which options fit best with the overall objectives?"
   - Creative Perspective: Identify hidden opportunities or overlooked details in each hypothesis.

   *2.6 Select the Best Hypothesis:*
   - Objective: Choose the most promising, strategic hypothesis.
   - Reflection: "Why does this hypothesis stand out? How does it uniquely address the issue?"
   - Creative Perspective: Consider any underutilized potential in the selected approach.

   *2.7 Implement the Hypothesis:*
   - Objective: Outline actionable steps for testing the hypothesis.
   - Reflection: "Is this plan practical? What resources or preparation are required?"
   - Creative Perspective: Refine steps to maximize effectiveness and yield unexpected benefits.

   *2.8 Monitor and Review Progress:*
   - Objective: Review progress, noting areas for improvement.
   - Reflection: "What’s working well? What could be improved?"
   - Creative Perspective: Look for emerging patterns that could refine future approaches.

   *2.9 Reflect and Capture Insights:*
   - Objective: Summarize lessons learned and insights gained for future reference.
   - Reflection: "What new understanding has emerged from this process?"
   - Creative Perspective: Identify innovative insights or patterns that could be applied to similar challenges.

3. *Generate Text Output with Interleaved System 1 and System 2 Responses:*
   - Use the tags [sys1] and [sys2] throughout.
   - Aim for a lengthier, detailed response. Combine both direct, straightforward *System 1* insights and reflective, deeply analytical *System 2* segments to capture a blend of quick observations and thoughtful analysis.

---

### *Example Input Text:*

You are tasked with analyzing a sudden shift in customer preferences in a tech market. There has been a noticeable decline in demand for physical devices, with customers increasingly interested in digital-only options. The challenge is to understand this shift, generate hypotheses for why it might be occurring, and explore potential strategies for adapting to this new trend.

---

### *Processed Output with System 1 and System 2 Thinking:*

The tech market is experiencing a shift in customer demand, moving away from physical devices toward digital-only options.

[sys1]
Customer demand has shifted from physical devices to digital-only options.
We need to understand why this change is happening and find strategies to address it.
Key factors may include cost, convenience, and technological trends.
[end sys1]

[sys2]
**2.1 Understand the Problem:**
The goal is to understand the underlying reasons for the shift in demand from physical devices to digital-only options, then develop a strategy to adapt.

*Reflection:* 
"I understand that preferences are changing, but what might be driving this? Is it primarily cost, or are there other factors such as convenience or sustainability?"

*Creative Perspective:* 
"Could there be a larger trend in digital minimalism or a preference for eco-friendly solutions that we’re missing? What unseen motivations might explain this shift?"

**2.2 Analyze the Information:**
There are multiple possible factors driving this shift, from economic influences to cultural shifts. It’s essential to isolate each factor and understand its impact.

*Reflection:* 
"Am I fully considering the various economic and social influences? Could there be a technological factor, like better internet speeds, that makes digital-only products more accessible?"

*Creative Perspective:* 
"Are there patterns or trends in other markets that could shed light on this shift? Could this be part of a larger trend toward virtual experiences?"

**2.3 Generate Hypotheses:**
1. Customers prefer digital options due to lower costs. (Confidence: 0.8, Creative: 0.4)
2. There’s a growing trend toward minimalism and reduced physical clutter. (Confidence: 0.7, Creative: 0.7)
3. Digital products offer greater flexibility and ease of use. (Confidence: 0.6, Creative: 0.6)
4. Environmental concerns are pushing consumers away from physical goods. (Confidence: 0.6, Creative: 0.8)
5. Advances in tech make digital-only options more functional. (Confidence: 0.8, Creative: 0.5)
6. Pandemic-era remote work increased demand for digital solutions. (Confidence: 0.7, Creative: 0.6)
7. Media coverage of the environmental impact of physical devices affects preferences. (Confidence: 0.5, Creative: 0.7)
8. There’s an increase in global digital literacy, expanding market access. (Confidence: 0.6, Creative: 0.6)
9. Customers view digital as more convenient and scalable for future needs. (Confidence: 0.7, Creative: 0.5)
10. Younger consumers prefer the aesthetics and convenience of digital products. (Confidence: 0.6, Creative: 0.6)

*Reflection:* 
"Have I considered all possible influences? Are there any surprising factors that could explain this shift?"

*Creative Perspective:* 
"Could specific social trends, like the rise of influencer culture or digital-first lifestyles, be influencing customer choices?"

**2.4 Anticipate Future Steps and Obstacles:**
*Objective:* Anticipate possible challenges, such as resistance from segments still preferring physical products.

*Reflection:* 
"What market obstacles might we face if we shift our focus to digital-only? Are there sub-segments that still prioritize physical products?"

*Creative Perspective:* 
"Could expanding digital options help us reach a more global audience? Are there emerging trends that we could leverage in our strategy?"

[end sys2]

[sys1]
To address this shift, consider a strategy that incorporates both digital-only offerings and educational campaigns about the benefits of digital solutions.
Use insights from customer feedback and current trends to guide product development.
Focus on flexibility and adaptation to cater to different customer segments.
[end sys1]



82 F.2d 221 (1936)
SAWTELL
v.
COMMISSIONER OF INTERNAL REVENUE.
No. 3065.
Circuit Court of Appeals, First Circuit.
March 6, 1936.
Charles M. Rogerson, of Boston, Mass. (Roger W. Hardy, of Boston, Mass., on the brief), for petitioner for review.
Arnold Raum, Sp. Asst. to Atty. Gen. (Frank J. Wideman, Asst. Atty. Gen., and J. Louis Monarch, Sp. Asst. to Atty. Gen., on the brief), for Commissioner.
Before BINGHAM, WILSON, and MORTON, Circuit Judges.
MORTON, Circuit Judge.
The question is whether the petitioner, Mrs. Sawtell, was properly taxed on the gain on a sale of certain shares of stock which at the time when the sale was made were owned by trustees. The Commissioner held that the gain was income taxable to her, and the Board of Tax Appeals affirmed his decision.
*222 In April, 1930, the petitioner owned 600 shares of the capital stock of the Charlestown Gas & Electric Company represented by voting trust certificates. The stock had been given to her by her husband during the preceding month. After it had become known that the shares were to be sold at a large profit, she transferred them to the Malden Trust Company as trustee on two separate trusts, 300 shares in each, one for each of her daughters. The terms of the trusts were that the trustee should sell the shares and hold the proceeds until January 1, 1931, on which date all the trust property was to be paid over to the grantor if she were then living; if not, each trust was to continue until the daughter of the petitioner, who was made the contingent beneficiary in it, reached the age of twenty-five years. The petitioner was then forty-two years old and in good health. The daughters were six and eight years old respectively. "The controlling motive of the petitioner and her husband in creating the trusts was to effect the sale of the shares of stock through the trusts in such a manner as to reduce the petitioner's individual income tax liability by eliminating the profits from the sale (of the stock) from her income of 1930." (Opinion of Board.)
The Board said in its opinion, "It is not to be supposed that in enacting the trust provisions of the statutes Congress intended that they should be availed of by taxpayers merely for the purpose of gaining an advantage in the computation of their tax." It accordingly held that the trusts should be disregarded and the gain taxed to the petitioner personally. This view cannot, we think, be supported. Nothing is better settled than that persons are free to arrange their affairs to the best advantage for themselves under the law as it stands. A purpose to minimize or avoid taxation is not an illicit motive. "A taxpayer may resort to any legal method available to him to diminish the amount of his tax liability." Mathews, J., Commissioner v. Eldridge (C.C.A.) 79 F.(2d) 629, 631. See, too, Bullen v. Wisconsin, 240 U. S. 625, 631, 36 S.Ct. 473, 60 L.Ed. 830; Jones v. Helvering, 63 App.D.C. 204, 71 F.(2d) 214.
In a very recent English case on this point it was said, "It was not, I think denied  at any rate it is incontrovertible  that the deeds were brought into existence as a device by which the respondent might avoid some of the burden of surtax. I do not use the word device in any sinister sense, for it has to be recognized that the subject, whether poor and humble or wealthy and noble, has the legal right so to dispose of his capital and income as to attract upon himself the least amount of tax. The only function of a court of law is to determine the legal result of his dispositions so far as they affect tax." Lord Atkin in Inland Revenue Commissioners v. Duke of Westminster, L.R.1936  A.C. 1, at pages 7, 8. "I confess that I view with disfavour the doctrine that in taxation cases the subject is to be taxed if, in accordance with a court's view of what it considers the substance of the transaction, the court thinks that the case falls within the contemplation or spirit of the statute. The subject is not taxable by inference or by analogy, but only by the plain words of a statute applicable to the facts and circumstances of his case." Lord Russell of Killowen, L.R.1936  A.C. page 24.
The trusts in this case were actual transactions legally established. While the petitioner's controlling motive in establishing them was to reduce her tax, it was clearly not the only motive. If she had died before January 1, 1931, it is unquestioned that the trusts would have continued many years for the benefit of her daughters, and that the trust property would not have been administered as part of her estate. Cases of fictitious sales or of transactions which were merely "masquerades" are not in point. Unless the trusts come within section 167, the income was not taxable to the petitioner.
Section 167 under which the tax was levied reads as follows:
"Sec. 167. Income for Benefit of Grantor. Where any part of the income of a trust may, in the discretion of the grantor of the trust, either alone or in conjunction with any person not a beneficiary of the trust, be distributed to the grantor * * * such part of the income of the trust shall be included in computing the net income of the grantor." (Italics supplied.) Revenue Act 1928, chapter 852, 45 Stat. 791, 840, § 167 (26 U.S.C.A. § 167 note).
The basic plan of the statute is that income of property held in trust shall be taxed to the fiduciary. The fiduciary is regarded for purposes of taxation as the legal owner of the property and of the income. *223 Section 167 is an exception to this basic plan, and it is referred to as an exception in section 161 (26 U.S.C.A. § 161 and note). Taken in its ordinary meaning, section 167 applies only to trusts in which the grantor has discretion to have the income accumulated for his benefit; it does not include trusts for the direct accumulation of income for the grantor. The Board of Tax Appeals, perhaps being influenced by its erroneous view of the law as above stated, held in the present case that section 167 was capable of a broad enough construction to include trusts like the present one. Subsequently the Board changed its view on this point and overruled that decision; and it now holds that such trusts are not within this section. Preston R. Bassett, Petitioner, v. Com'r, 33 B.T.A. 182, October 11, 1935. General provisions relating to "income accumulated or held for future distribution under the terms of the will or trust" are contained in section 161. The question really is whether the income in question shall be taxed under that section, or whether the language of section 167 should be so broadened by construction as to include it. It is settled that "in statutes levying taxes the literal meaning of the words employed is most important for such statutes are not to be extended by implication beyond the clear import of the language used." Sutherland, J., United States v. Merriam, 263 U.S. 179, 187, 188, 44 S.Ct. 69, 71, 68 L.Ed. 240, 29 A.L.R. 1547.
We do not see how on any reasonable reading of the language of section 167 it can be held to cover trusts like the present one. No doubt the situation before us is a casus omissus, the amendment of this section in the Revenue Act of 1932 (section 167 [26 U.S.C.A. § 167 and note]) and the committee's reports on the change make that clear, but we do not think that in a tax statute the court has power to extend it by construction to include such cases unless they come within the language used on reasonable interpretation of it. "The extension of a tax by implication is not favored." Stone, J., Reinecke v. Gardner, 277 U.S. 239, 244, 48 S.Ct. 472, 474, 72 L. Ed. 866. While the fact that the section was amended so as to include trusts like the one before us is by no means conclusive that it did not include them previously, it does show great doubt on the part of Congress whether the language as it stood did so. On this point we think that the present view of the Board of Tax Appeals is correct and that that contrary rule which it applied in this case was erroneous.
The decision of the Board of Tax Appeals is reversed and the case remanded to that Board for further proceedings not inconsistent with this opinion.