TGIF. Philosophy, morality, and ideology are thin fig leaves for a society obsessed with war, spectator sports, drugs, the Kardashians, and other sexual exploits. People do like security and they take pride in their work. If we forget the lives of people then we are just talking to ourselves. Hey, don’t mind me. I had some trouble last night explaining to my wife that the difference between the KKK and BLM was over 150 years of history. Unfortunately my wife is a very good representative of mainstream middle class white society, Episcopalian born and raised in Enfield CT. We more or less liberal folk have created a problem for ourselves that there is no way to talk our way out of. We are going to need to learn to practice empathy on a more personal level and practice policy as if people lived in world instead of a book. OTOH, I take solace that Trump is gone, but unfortunately not forgotten, and that ordinary Joe is POTUS now.
Biden, Yellen and the War on LeprechaunsBribing corporations with low taxes isn’t the way to create jobs.
https://www.nytimes.com/2021/04/08/opinion/biden-corporate-taxes.html?smid=tw-shareNY Times – Paul Krugman – April 9 In the summer of 2016, Ireland’s Central Statistical Office reported something astonishing: The small nation’s gross domestic product had risen 26 percent in the previous year (a number that would later be revised upward). It would have been an amazing achievement if the growth had actually happened.But it hadn’t, as government officials acknowledged from the beginning. It was, instead, an illusion created by corporate tax games. At the time, I dubbed it “leprechaun economics,” a coinage that has stuck; luckily, the Irish have a sense of humor about themselves.What really happened? Ireland is a tax haven, with a very low tax rate on corporate profits. This gives multinational corporations an incentive to create Irish subsidiaries, then use creative accounting to ensure that a large share of their reported global profits accrue to those subsidiaries.In 2015 a few big companies appear to have gotten even more aggressive about their profit-shifting, which led to a surge in the value of production they reported doing in Ireland — a surge that didn’t correspond to anything real.To understand the big corporate tax reform proposed by the Biden administration, what you need to know is that it’s all about the leprechauns. One way to think about the huge corporate tax cut Republicans rammed through in 2017 is that its underlying premise was that the leprechauns were real. That is, the tax cut’s architects insisted that corporations had been moving operations abroad to avoid U.S. taxes, and that slashing those taxes would bring millions of jobs back home.It didn’t happen. In fact, the tax cut had no visible effect on business investment, probably because it was addressing a fake problem. U.S. corporations hadn’t been moving jobs overseas to avoid taxes; they had just been avoiding taxes.The true impact — or actually lack of impact — of profit taxes on business decisions becomes obvious if you look at where corporations report big overseas earnings.If they were truly responding to taxes by making large foreign investments that eliminated American jobs, we’d expect to see a lot of their profits coming from major production centers like Germany or China. Instead, more than half of the profits U.S. corporations report from overseas investments come from tiny tax havens, including places like Bermuda and the Cayman Islands where they have no real business at all.By the way, this isn’t just an American problem. The International Monetary Fund estimates that about 40 percent of the world’s foreign direct investment — basically corporate cross-border investment, as opposed to “portfolio” purchases of stocks and bonds — is “phantom” investment, accounting fictions set up to avoid taxes. That’s why on paper Luxembourg, with just 600,000 people, hosts more foreign investment than the United States does.So the real problem with U.S. corporate tax policy isn’t loss of jobs, it’s loss of revenue — and the Trump tax cut made that problem worse.For the most part the Biden administration’s Made in America Tax Plan is an effort to reclaim the revenue lost both as a result of profit-shifting and as a result of the Trump tax cut, in order to help pay for large-scale public investment.As the plan’s name suggests, the administration’s experts — at this point it’s hard to find a tax expert who hasn’t joined the Biden team — do believe that there are aspects of the U.S. tax code that have created an incentive to move jobs abroad. But they see the problem as the consequence of details of the tax code rather than the overall burden of taxation.And while they believe that tax reform can improve incentives to invest in America, the main focus of the plan — even of things like the proposal for a 21 percent minimum tax rate on overseas profits, emphasized by Janet Yellen, the Treasury secretary — isn’t on these incentives so much as on increasing revenue from the corporate profits tax, which falls mainly on the wealthy and on foreigners, and is at a historical low as a percentage of G.D.P. …
AUGUSTA, Ga. — José María Olazábal hit a tee shot at Augusta National Golf Club’s 12th hole one day this week, jokingly bowed to the spectators and meandered toward the green of one of the great holes in golf.Much of the gallery swiftly headed toward one of the great bargains in sports: the Amen Corner concession stand, where fans at the Masters can come by a meal — sandwich, soft drink and a cookie — for as little as $5.The famously controlling club has spent decades accepting that it cannot, in fact, control the weather. But economic forces surrounding the tournament are well within reason, and so the price of a pimento cheese sandwich has stood at $1.50 since 2003. Adjusted for inflation, and assuming the sandwich was appropriately priced to begin with, it should be about $2.14.Economists believe the enduring bargain, at odds with an era of sticker-shock prices at many athletic events, is not merely a matter of Southern hospitality. Instead, they see hard-nosed, soft-power genius: a thrifty way to cultivate the mystique that has helped make the Masters brand one of the most valuable in sports. …
TGIF. Philosophy, morality, and ideology are thin fig leaves for a society obsessed with war, spectator sports, drugs, the Kardashians, and other sexual exploits. People do like security and they take pride in their work. If we forget the lives of people then we are just talking to ourselves. Hey, don’t mind me. I had some trouble last night explaining to my wife that the difference between the KKK and BLM was over 150 years of history. Unfortunately my wife is a very good representative of mainstream middle class white society, Episcopalian born and raised in Enfield CT. We more or less liberal folk have created a problem for ourselves that there is no way to talk our way out of. We are going to need to learn to practice empathy on a more personal level and practice policy as if people lived in world instead of a book. OTOH, I take solace that Trump is gone, but unfortunately not forgotten, and that ordinary Joe is POTUS now.
https://www.nytimes.com/2021/04/08/opinion/biden-corporate-taxes.html?smid=tw-shareNY Times – Paul Krugman – April 9 In the summer of 2016, Ireland’s Central Statistical Office reported something astonishing: The small nation’s gross domestic product had risen 26 percent in the previous year (a number that would later be revised upward). It would have been an amazing achievement if the growth had actually happened.But it hadn’t, as government officials acknowledged from the beginning. It was, instead, an illusion created by corporate tax games. At the time, I dubbed it “leprechaun economics,” a coinage that has stuck; luckily, the Irish have a sense of humor about themselves.What really happened? Ireland is a tax haven, with a very low tax rate on corporate profits. This gives multinational corporations an incentive to create Irish subsidiaries, then use creative accounting to ensure that a large share of their reported global profits accrue to those subsidiaries.In 2015 a few big companies appear to have gotten even more aggressive about their profit-shifting, which led to a surge in the value of production they reported doing in Ireland — a surge that didn’t correspond to anything real.To understand the big corporate tax reform proposed by the Biden administration, what you need to know is that it’s all about the leprechauns. One way to think about the huge corporate tax cut Republicans rammed through in 2017 is that its underlying premise was that the leprechauns were real. That is, the tax cut’s architects insisted that corporations had been moving operations abroad to avoid U.S. taxes, and that slashing those taxes would bring millions of jobs back home.It didn’t happen. In fact, the tax cut had no visible effect on business investment, probably because it was addressing a fake problem. U.S. corporations hadn’t been moving jobs overseas to avoid taxes; they had just been avoiding taxes.The true impact — or actually lack of impact — of profit taxes on business decisions becomes obvious if you look at where corporations report big overseas earnings.If they were truly responding to taxes by making large foreign investments that eliminated American jobs, we’d expect to see a lot of their profits coming from major production centers like Germany or China. Instead, more than half of the profits U.S. corporations report from overseas investments come from tiny tax havens, including places like Bermuda and the Cayman Islands where they have no real business at all.By the way, this isn’t just an American problem. The International Monetary Fund estimates that about 40 percent of the world’s foreign direct investment — basically corporate cross-border investment, as opposed to “portfolio” purchases of stocks and bonds — is “phantom” investment, accounting fictions set up to avoid taxes. That’s why on paper Luxembourg, with just 600,000 people, hosts more foreign investment than the United States does.So the real problem with U.S. corporate tax policy isn’t loss of jobs, it’s loss of revenue — and the Trump tax cut made that problem worse.For the most part the Biden administration’s Made in America Tax Plan is an effort to reclaim the revenue lost both as a result of profit-shifting and as a result of the Trump tax cut, in order to help pay for large-scale public investment.As the plan’s name suggests, the administration’s experts — at this point it’s hard to find a tax expert who hasn’t joined the Biden team — do believe that there are aspects of the U.S. tax code that have created an incentive to move jobs abroad. But they see the problem as the consequence of details of the tax code rather than the overall burden of taxation.And while they believe that tax reform can improve incentives to invest in America, the main focus of the plan — even of things like the proposal for a 21 percent minimum tax rate on overseas profits, emphasized by Janet Yellen, the Treasury secretary — isn’t on these incentives so much as on increasing revenue from the corporate profits tax, which falls mainly on the wealthy and on foreigners, and is at a historical low as a percentage of G.D.P. …
https://www.nytimes.com/2021/04/09/sports/golf/augusta-masters-sandwich-prices.html?smid=tw-share