European tech tax grab risks U.S. backlash 27 Feb 2018 The EU may tax groups like Google 5 pct of sales based on where users are located. It’s an unsubtle solution to a real problem. But after recent U.S. reforms intended to keep profit at home, the two are reaching for the same slice of pie. The danger is a harmful tax tit-for-tat.
JPMorgan’s new goals hint at U.S. tax doublespeak 27 Feb 2018 The bank hiked its main return target to factor in last year’s tax cuts. While some benefits may get competed away, for now shareholders get the lion’s share. Investing in the community is well and good, but so too is payback after years of absorbing higher costs.
George Foreman Grill maker gets leaner, not meaner 26 Feb 2018 The maker of the famed kitchen device – as well as bits and bobs ranging from faucets to fish food – is combining with its majority owner in a deal valued at $10 billion. Spectrum Brands comes out with a neater structure. Its collection of businesses, though, is still messy.
Ares tax switcheroo may attract few copycats 15 Feb 2018 The manager of $106 bln in alternative assets is going to pay U.S. corporate tax rather than elect for partnership treatment. That should boost its investment appeal – and, for Ares, the numbers add up. The likes of Blackstone, with lumpier earnings, probably have less to gain.
Fannie, Freddie rear ugly heads from 10-year limbo 15 Feb 2018 The two are asking the U.S. Treasury for $4 bln after recent tax cuts dented fourth-quarter earnings. It’s not the rescue critics claim. But the awkward dependence on public coffers means next time, it could be. The politics of needed reform have only worsened since the crisis.
Congress holds its nose over U.S. fiscal restraint 8 Feb 2018 The legislature passed a deal early on Friday to raise spending by several hundred billion dollars, just two months after a $1.5 trln tax cut. The strain on government coffers during a roaring economy will leave politicians with far less ammo when the next downturn arrives.
Auto 2.0 race is becoming General Motors’ to lose 6 Feb 2018 Cost cuts and SUV and truck sales are boosting earnings. CEO Mary Barra has also pulled out of troubled markets. That leaves the automaker well positioned to lead mass production of electric and self-driving vehicles – as long as Barra can leave behind its accident-prone past.
Dell has no time for fantasy finance 29 Jan 2018 The U.S. tech giant needs cash to pay taxes, reduce debt and let investors exit. Reversing into its $53 bln subsidiary VMware is too complex, while an IPO would be financially unattractive because of pricey past acquisitions. There are simpler, more logical ways to raise cash.
Viewsroom: Trump solar tax is more burn than balm 25 Jan 2018 The U.S. president seems to be trying to right past trade wrongs. But business has long since moved on, meaning tariffs on washing machines and solar panels will do more harm than good. Also, Merkel and Modi disappoint in snow-ravaged Davos. Plus: Spotify’s Wall Street snub.
U.S. tax cuts pile on pressure for GE to shrink 24 Jan 2018 They should help, long term. But a big charge contributed to a whopping $9.8 bln fourth-quarter loss at the conglomerate, whose top line also declined. Cost cuts and cash-flow gains buy CEO John Flannery breathing room, but the breakup option is looming increasingly large.
Jamie Dimon’s $20 bln investment is pitch-perfect 23 Jan 2018 JPMorgan is boosting wages, branches, lending and philanthropy, all partly thanks to U.S. tax cuts. The plan makes the Trump administration look good. But the lender had the wherewithal to do most of it already. And shareholders will benefit most from Uncle Sam’s largesse.
Trump’s solar tariffs add new wrong to old 22 Jan 2018 The levies should ease pressure on surviving panel makers, who account for about 15 pct of the U.S. solar industry’s 260,000 jobs. But pricier imports will set back installers that dominate the sector. It’s an illustration of how difficult righting past trade unfairness can be.
U.S. shutdown is expensive in more ways than one 22 Jan 2018 Lawmakers agreed Monday to reopen the federal government after a brief closure. Spending halts have only a modest impact on the economy and financial markets, but they cost taxpayers and risk deepening partisan divides. It’s a pricey tool that perpetuates Washington dysfunction.
Tax cuts are looking like rare Trump win 19 Jan 2018 The U.S. president’s first anniversary coincides with a possible federal funding hiatus. Slashing corporate taxes last month was a GOP success and the administration now wants infrastructure investment. But the shutdown wrangling is indicative of the partisan deadlock to come.
Amex is a rare real victim of U.S. tax cuts 18 Jan 2018 The $86 bln charge-card group took a big hit from December’s tax revamp. Unlike at other financial firms, its capital ratios fell below acceptable levels. Suspending buybacks to rebuild the cushion makes sense, but it will delay the benefits of the new low-tax regime.
Gasoline tax is obvious infrastructure piggy bank 18 Jan 2018 The U.S. Chamber of Commerce wants a 25 cents-a-gallon increase to raise $400 bln for investment in transportation. It seems a contrary proposal coming from a group whose members just secured huge tax cuts. But it makes sense: American gas is cheap, and a higher levy is overdue.
Tim Cook goes as American as Apple’s pie 17 Jan 2018 The iPhone maker will pay $38 bln in tax on its huge pile of overseas cash. It’s also pulling an Amazon with plans to open a new U.S. campus, invest $30 bln and create 20,000 jobs. The Apple boss has cleverly engineered some common ground with Donald Trump.
Citi investors go through the tax looking glass 16 Jan 2018 U.S. tax cuts pushed the lender into an $18.3 bln loss, but should boost future earnings. That means boss Mike Corbat can be more ambitious about recently set growth targets. Citi’s recovery may be driven largely by forces beyond its control, but that’s not always a bad thing.
Scrapping UK bank levy is easy post-Brexit win 16 Jan 2018 As Britain leaves the European Union, the UK government is eager to persuade lenders to stay in London. But watering down regulations would risk irking Brussels. Getting rid of the surcharge on banks' balance sheets would be a simpler way to dust down the welcome mat.
Wall Street banks need yet another earnings metric 12 Jan 2018 JPMorgan, Wells Fargo and peers already deluge investors with performance measures. But tax cuts will make it easier for them to hit returns targets – and for executives to claim bonuses despite mediocre growth. Pre-tax returns on equity would be a helpful alternative yardstick.