Walmart pay hike is less than largesse 11 Jan 2018 The $300 bln U.S. supermarket chain is raising hourly wages by $300 mln. That’s just a sliver of what it could save through tax cuts, but that may not be the biggest driver anyway. In fact, with super-low unemployment, it’s a wonder Walmart can get away with so little.
German economic success lays trap for Merkel 11 Jan 2018 The strongest growth in six years and the rude health of public finances may tempt a weakened Chancellor Angela Merkel into budget giveaways. But low interest payments flatter the fiscal picture and won’t endure. Better to invest in infrastructure and education than to cut taxes.
Hadas: Fiscal debts are not our children’s burden 10 Jan 2018 When this generation dirties the water, the next has to pick up the tab. Debt is different. When governments borrow from taxpayers, the children will both pay the bill and enjoy the proceeds. The real deficit dangers lurk in foreign debt and distributional distortions.
Duterte’s infrastructure push needs more than cash 2 Jan 2018 A new revenue-raising tax bill will help Philippines President Rodrigo Duterte pay for a “golden age of infrastructure” to increase competitiveness and living standards. The challenge will be to deploy the proceeds efficiently and without fostering corruption.
Goldman loses on tax swings, gains on roundabouts 29 Dec 2017 President Trump’s tax reform will knock $5 bln off the Wall Street firm’s bottom line, two-thirds of it from a one-time hit to foreign earnings. That’s just noise for investors to filter out. Other goodies, like a lower overall rate, should leave Goldman substantially better off.
Trump tax cut is sack of coal for foreign banks 29 Dec 2017 The U.S. president says reduced corporate taxes are a Christmas present. But a levy on interest payments to overseas companies could hit lenders with U.S. subsidiaries. The provision, the base erosion and anti-abuse tax, might even cancel out the benefit of a lower headline rate.
U.S. buyback surge will incinerate wealth in 2018 28 Dec 2017 Companies will get a windfall from Republican tax cuts and repatriated profits. The White House claims the money will spur jobs and wages, but a similar Bush policy mostly fueled share repurchases. If GE’s experience is any guide, the largesse will burn value on a grand scale.
Xi’s tighter grip will tax Chinese real estate 26 Dec 2017 The president will sideline traditional policy shops, in particular the Ministry of Finance, and assign policymaking to opaque smaller groups. That will accelerate some reforms, in particular the long-discussed national property tax, which could squeeze the housing market.
Tax cuts crystallize haves, wants, can’ts, won’ts 21 Dec 2017 AT&T, Comcast, Boeing and Wells Fargo are among companies sharing the wealth from lower levies with workers. Most have reason to curry favor with the White House. So such deals may be less than they seem – while others will struggle to hold on to any benefits at all.
Cox: Is Wall Street more democratic than America? 20 Dec 2017 Taxpayers in the most productive U.S. states would be forgiven for asking the question after the way Congress treated them with a slapdash tax bill skewed to corporations, not people. The big risk is that while capitalism becomes more representative, America goes the other way.
How to know if America’s big tax bet pays off 20 Dec 2017 Republican lawmakers have passed revised tax cuts that give even more breaks to companies and the wealthy. They are banking on those benefits trickling down to average workers. It could come back to haunt them. Breakingviews notes a few ways to measure the policy’s success.
People vs. companies tax bill shafts U.S. expats 14 Dec 2017 Businesses are awash in riches in the Republican plan. Besides cutting the corporate rate, GOP lawmakers want to impose taxes based on where income is earned. But some 9 mln Americans working overseas won’t get that benefit. It’s another instance of corporations trumping humans.
Japan’s creative pay push contains mismatch flaw 15 Dec 2017 A fresh tax-rate cut rate gives employers an incentive to raise worker wages and invest in factories. The link recognises the folly of trusting companies to use a windfall to spread the wealth. One big hitch in the plan is that the corporate cost will far outlast the benefit.
The Exchange: NY Deputy Mayor Alicia Glen 13 Dec 2017 How bad will the Republican tax plan be for New York City? Alicia Glen, who looks after economic development for America's largest city, says it will hit 700,000 taxpayers and depress property values. But it won't make the Big Apple any less appetizing for the best and brightest.
Alabama voters put anger before economics 13 Dec 2017 Democrat Doug Jones won the state’s U.S. Senate race in a stunning upset. Rival Roy Moore has unique troubles, namely allegations of sexual misconduct. But Trump’s approval has also fallen, despite Alabama’s low jobless rate. The Republican economic-growth message isn’t a magic elixir.
Hadas: The mystery of lost competition 6 Dec 2017 The U.S. tax cut is expected to boost corporate earnings but not lower prices or raise wages. That implies there’s too much tacit collusion for basic economic theory to work as designed. Limited price competition is great for shareholder value, but bad for the economy.
Rushed U.S. tax bill rewards oil, real estate 4 Dec 2017 The Republican Senate plan snuck in tax breaks for oil and gas partnerships, real-estate investment trusts and other sectors. One hiccup puts the research tax credit favored by business at risk. But overall, corporate America and the wealthy may receive an early Christmas gift.
GOP casts principle aside in scramble for tax win 2 Dec 2017 Senate Republicans passed a tax cut plan after last-minute changes papering over deficit concerns and the bill’s tilt to the wealthy. Differences with the House must be reconciled. But an escalating Russian influence probe makes the party even more frantic to claim a victory.
Botched process leads to Frankenstein tax plan 30 Nov 2017 U.S. Senate Republicans are rushing into a vote on their tax-cut effort. Changes to appease GOP critics have yet to be settled, including a trigger to raise taxes if growth falls short. Lower-income Americans will also face higher bills. Lawmakers are creating a scary mess.
U.S. doesn’t even have a corporate tax problem 30 Nov 2017 Proposals in Congress would cut the levy on companies and, temporarily, on individuals. The move may give a late-cycle boost to the economy but add to the deficit and debt. The irony is that corporate profit is already plentiful while Uncle Sam's tax take is historically low.