Results for “corporate tax” 187 found
Monday assorted links
1. “Sociable weavers work together to construct large nests in southern Africa, often in acacia trees. The nests can weigh as much as 1 ton and house up to 200 birds in individual chambers. Their cooperative behaviors also include chick rearing and defense against snakes and falcons.” Link here.
2. Why so much regional inequality in Britain (The Economist).
3. Both of these supposed Gauguins look like fakes to me.
4. Shruti on Indian Matchmaking (Bloomberg).
5. A sort of funny tweet stream about cross-national comparisons of corporate tax laws.
6. New and positive results on deworming.
7. “Zombie cicadas” infected with mind-controlling fungus return to West Virginia.
Tuesday assorted links
1. North Korean restaurants in Russia fail to draw diners.
2. Repeat link, but corporate taxes do seem to discourage investment. Just in case you had forgotten, or in case you had starting believing that correlation implies causation, or that lack of correlation implies lack of causation. Or something like that.
3. EV winner Lama Al Rajih works with Culdesac, a start-up that just premiered (WSJ), devoted to walkable, carless residential neighborhoods.
4. Caplan responds to Garett Jones on open borders.
5. Here is a serious pro-Morales take covering recent events in Bolivia.
My recent talk at OECD
It covers privacy, Facebook, security vs. competition, Huawei, the proposed digital tax, and recent OECD corporate tax proposals. Here is the video.
Publicly traded firms do not have an investment deficit
Using data from U.S. corporate tax returns, which provide a sample representative of the universe of U.S. corporations, we investigate the differential investment propensities of public and private firms. Re-weighting the data to generate observationally comparable sets of public and private firms, we find robust evidence that public firms invest more overall, particularly in R&D. Exploiting within-firm variation in public status, we find that firms dedicate more of their investment to R&D following IPO, and reduce these investments upon going private. Our findings suggest that public stock markets facilitate greater investment, on average, particularly in risky, uncollateralized investments.
That is by Naomi Feldman, et.al., from the Fed. Via Andrew McAfee and Matt Yglesias. Of course, this is very much the opposite of what you usually hear from other sources.
Friday assorted links
Is the case for free trade still valid in a world of welfare states?
That is a request from dearieme, and the answer is yes, the case for free trade is still valid.
First, some welfare states, such as the United States and Denmark, are quite compatible with full employment, or could be compatible with full employment if say monetary policy were better. The welfare state may still, through say tax rate effects, keep some family second earners out of the work force. That is likely inefficient, but it doesn’t boost the case for protectionism.
Second, the actual second best problem comes when a welfare state (especially a poorly designed one, and there are some of those) interacts with job churn. Given that some people are out of work, the welfare state may limit their incentive for job search, or the associated taxes and regulations may limit job creation on the employer side. So some workers will lose their jobs due to foreign competition, and find reemployment difficult or not sufficiently desirable relative to the dole.
Overall, though, a lot of those jobs were going to disappear anyway, because of either automation or simply shifts in consumer demand. In that sense free trade is simply the “messenger,” rather than a unique villain. Are jobs more precarious in larger trade zones? I can’t recall seeing a protectionist make that case, instead they simply rely on the superficial observation of the first-order, visible effect, namely that some jobs have gone away for trade-related reasons. The possibility of importing intermediate goods makes many jobs more stable, as do exports. There is no a priori reason to expect free trade to under-perform in this regard.
Free trade still gives an economy more wealth for dealing with transition problems, and it gives workers a better chance of finding a new job somewhere else. To be sure, not all classes or regions of workers will benefit from this dynamism at any point in time. But a welfare state will help protect those workers who do not.
For all of those reasons, the case for free trade is robust to having welfare states.
Alternatively, you might try a “race to the bottom” argument for thinking that free trade and welfare states may interact in counterproductive ways. Let’s say that free trade causes governments to compete to lure or keep business activity. That tends to encourage a social welfare state funded through consumption taxes (not corporate taxes), accompanied by a minimum of regulation. That sounds like an OK enough race to me. I’m not even sure there is a race to the bottom on the regulatory side, but at the very least there are incentives for regulation not to exceed a manageable level, again all to the better.
Monday assorted links
1. America is still a suburban nation.
2. “Evidence from applying this framework to these data indicates that between and 45 and 75 percent of the
burden of corporate taxes is borne by labor with the balance borne by capital.” That estimate seems high to me, but this paper is a serious effort.
3. Germany bans children’s smart watches.
4. “One of the friends who helped her through that period was Ivanka Trump, though their relationship has grown more complicated.” This article is really quite something. NYT, you have to keep on reading to grasp the narrative.
5. 100 cryptocurrencies in four words or less. You can play this game in your car with the children.
6. Most popular names for girls, state-by-state, year-by-year What is it with Nebraska and “Addison”?
Thursday assorted links
1. Eric Ohrn, on cutting corporate rates, using variation from the DPAD.
2. Derek Thompson is not yet a reactionary.
3. Tinder for Canadian policymakers.
4. When FDR filed for the EITC.
5. Useful Steve Landsburg on corporate tax incidence. And more Krugman. And the Larry Summers tax plan.
6. Will Wilkinson.
Sunday assorted links
1. Is the BBC tailoring some content to do away with the plot?
2. Mark Koyama reviews Peter Leeson.
3. Paul Krugman responds on corporate tax incidence. I see this as a classic case of “as usual the truth lies somewhere in between.” In response to Paul, foreign capital goes after American rents all the time (ask Toyota), exchange rate overshooting models have little validity in the data (“news” moves exchange rates), and I don’t see why the long-run is a bad guide to tax policy. That said, I do think more of the burden of capital taxation falls on capital than labor, but plenty falls on labor nonetheless. See the most recent comments from Summers, stronger arguments overall.
4. “The Seattle Sperm Bank categorizes its donors into three popular categories: “top athletes,” “physicians, dentists and medical residents,” and “musicians.”” Link here.
5. Excellent Scott Sumner post on an excellent John Cochrane post.
Saturday assorted links
Tuesday assorted links
1. There is no great caffeine bracelet stagnation.
2. Greg Mankiw seems to favor the new Republican tax plan. And Krugman comments. I say anything complicated they will just screw up, and the lack of transparency in the plan means eventually it will lead to a tax hike and furthermore a good deal of favoritism and rent-seeking along the way. Best hope is simply that they cut the corporate tax rate and don’t do much else on that front.
3. Chinese social media as a form of surveillance.
Friday assorted links
1. Long chat/profile with me, in Brazilian Portuguese.
2. Cargo containers for Lagos housing.
3. Will India replace cash with biometric e-payments?
4. Noordhoek eco-estates protect the rich from the reality of Masiphumelele.
5. The rich have a lower inflation rate (pdf).
6. John Cochrane on corporate tax.
7. “In summary: Most US imports from Mexico are intermediate and investment goods, not consumer goods.“
Peter Navarro outlines the Trump economic plan
To score the benefits of eliminating trade deficit drag, we don’t need any complex computer model. We simply add up most (if not all) of the tax revenues and capital expenditures that would be gained if the trade deficit were eliminated. We have modeled only the impacts of implicit profits and wages, not any other economic aspect of the increased activity.
Trump proposes eliminating America’s $500 billion trade deficit through a combination of increased exports and reduced imports. Again assuming labor is 44 percent of GDP, eliminating the deficit would result in $220 billion of additional wages. This additional wage income would be taxed at an effective rate of 28 percent (including trust taxes), yielding additional tax revenues of $61.6 billion.
In addition, businesses would earn at least a 15% profit margin on the $500 billion of incremental revenues, and this translates into pretax profits of $75 billion. Applying Trump’s 15% corporate tax rate, this results in an additional $11.25 billion of taxes.
Emphasis is added by this author.
Here is the full document (pdf). Here is my earlier profile of Peter Navarro. For the pointer I thank the excellent Binyamin Appelbaum.
Addendum: Scott Sumner comments.
Elasticity optimism for me but not for thee
How many who think we should subsidize manufacturing also think high corporate tax rates are harmless?
That is from Modeled Behavior.
Growth of income and welfare in the U.S, 1979-2011
This new NBER paper by John Komlos is of real interest, and it documents the “average is over” idea of the dwindling of middle class fortunes:
We estimate growth rates of real incomes in the U.S. by quintiles using the Congressional Budget Office’s (CBO) post-tax, post-transfer data as basis for the period 1979-2011. We improve upon them by including only the present value of earnings that will accrue in retirement and excluding items included in the CBO income estimates such as “corporate taxes borne by labor” that do not increase either current purchasing power or utility. We estimate a high and a low growth rate using two price indexes, the CPI and the Personal Consumption Expenditure index. The major consistent findings include what in the colloquial is referred to as the “hollowing out” of the middle class. According to these estimates, the income of the middle class 2nd and 3rd quintiles increased at a rate of between 0.1% and 0.7% per annum, i.e., barely distinguishable from zero. Even that meager rate was achieved only through substantial transfer payments. In contrast, the income of the top 1% grew at an astronomical rate of between 3.4% and 3.9% per annum during the 32-year period, reaching an average annual value of $918,000, up from $281,000 in 1979 (in 2011 dollars). Hence, the post-tax, post-transfer income of the 1% relative to the 1st quintile increased from a factor of 21 in 1979 to a factor of 51 in 2011. However, income of no other group increased substantially relative to that of the lowest quintile. Oddly, the income of even those in the 96-99 percentiles increased only from a multiple of 8.1 to a multiple of 11.3. We next estimate growth in welfare assuming diminishing marginal utility of income. A logarithmic utility function yields a growth in welfare for the middle class of roughly 0.01% to 0.07% per annum, which is indistinguishable from zero. With interdependent utility functions only the welfare of the 5th quintile experienced meaningful growth while those of the first four quintiles tend to be either negligible or even negative.