Friday , June 18 2021
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Tag Archives: Taxes

What about Japan?

What about Japan? It's a question I often hear from advocates of fiscal expansion. Japan has huge debts and no crisis or inflation (so far). Doesn't that prove the US can borrow a ton more money painlessly? I offer two new points today: 1) Not every high debt country is so happy. 2) Just what did Japan get for all its fiscal stimulus? Indeed, I will start asking "What about Japan?" Japan seems a tough case for those who advocate that fiscal stimulus will save us from secular stagnation,...

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The price of indulgences, 2021

 Source. My correspondent provides the answer: 5bps: IVV (column #3) (iShares Core S&P 500 ETF)15bps: ESGU (column #1)  (iShares ESG Aware MSCI USA ETF) 30bps: LCTU (column #2) (BlackRock U.S. Carbon Transition Readiness ETF) “Sea change” quote from BlackRock here I have not independently checked, though the answer hardly matters. The fees and portfolios tell the story. Obviously any claim that this ESG portfolio will outperform after fees is ......

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Cruz on crony capitalism

Senator Ted Cruz wrote a blistering Wall Street Journal Op-Ed decrying CEOs who pander to Democrats by making profoundly uninformed public statements. He announced that he will no longer take money from their corporate political action committees. And, he statesThis time, we won’t look the other way on Coca-Cola’s $12 billion in back taxes owed. This time, when Major League Baseball lobbies to preserve its multibillion-dollar antitrust exception, we’ll say no thank you. This time, when Boeing...

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Donald Trump’s “eighth wonder of the world” shrinks from $10 billion to $674 million

Article from Reuters, “Foxconn mostly abandons $10 billion Wisconsin project touted by Trump”: Under a deal with the state of Wisconsin announced on Tuesday, Foxconn will reduce its planned investment to $672 million from $10 billion and cut the number of new jobs to 1,454 from 13,000. The Foxconn-Wisconsin deal was first announced to great fanfare at the White House in July 2017, with Trump boasting of it as an example of how his “America first” agenda could revive U.S. tech manufacturing....

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Inequality mirage?

David Splinter and Gerald Auten gave last week's Hoover Economic Policy Working Group seminar, summarizing their past and some work in progress on the distribution of income.  Link in case the above embed does not work. A recent paper. Splinter's web page. Splinter and Auten are very even handed, just-the-facts, economists. I'll pass on their facts. Grumpy interpretations are my own. It is a fact generally accepted that income inequality has grown a lot recently, and this is a...

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When (US) Corporate Tax Rate Reductions Last Bloomed

Under the Tax Cuts and Jobs Act, no enormous surge in capital investment appeared, above and beyond what could be explained by aggregate demand changes. From the conclusion to U.S. Investment Since the Tax Cuts and Jobs Act of 2017, by Emanuel Kopp, Daniel Leigh, Susanna Mursula, and Suchanan Tambunlertchai. In the year following the passage of the TCJA, U.S. business investment grew strongly  compared to pre-TCJA forecasts and outperformed investment growth in other major  advanced...

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Infrastructure Investment and Taxes

I talked about infrastructure investment and taxes on WPR  today. Will higher corporate tax rates and closing of loopholes in the taxation of raise prices of goods produced? Given what happened in the wake of the 2017 reduction in corporate tax rates (i.e., lots of stock buybacks, not much higher investment), I think a resulting price increase not likely. On the other hand, the infrastructure spending could have an impact on productivity and hence prices. And infrastructure spending has...

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Defining inequality so it can’t be fixed

In one of their series of excellent WSJ essays, Phil Gramm and John Early notice that conventional income inequality numbers report the distribution of income before taxes and transfers. After taxes and transfers, income inequality is flat or decreasing, depending on your starting point. Source: Phil Gramm and John Early in the Wall Street JournalIf your game is to argue for more taxes and transfers to fix income inequality, that is a dandy subterfuge as no amount of taxing and...

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The puzzle of Europe

Here are two unsettling slides I made for a talk. Here is GDP per capita in US, UK, France and Italy and China (2020 dollars, source world bank) To make the comparison easier, here is each country not including China, divided by the US: Here are the 2019 numbers (in 2019 dollars, again World Bank) US: $65,297. UK $42,330. That's 35% less than the US. Or, the US is  54% better off than the UK.. France: $40,494. Italy: $33,228 That's 50% less than US. Or the US is 96% better...

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Guest Contribution: “Republicans oppose deficits only when Democrats hold the White House”

Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy  School of Government, and formerly a member of the White House Council of Economic Advisers. A appeared at Project Syndicate. High among the many priorities of newly-inaugurated US President Joe Biden are the challenges of an economy that appeared to be slowing down as 2020 ended, with the latest employment numbers looking bleak.  A fourth-quarter slowdown in the US recovery...

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