Corporate “inversions” are back in the news again, as multinational corporations try every “creative” way they can to get out of paying their fair share of taxes for being located in the United States. With inversions, the idea is to pretend to be a foreign company even though it is physically located and the majority […]
A lot going on with the minimum wage lately, but I will contextualize it first with Thomas Piketty’s analysis in Capital in the Twenty-First Century, pp. 308-313. It’s important to remember that one of the keys to the book’s success is that it is built on a gigantic trove of long-term data. His French wealth […]
As I have reported before, job piracy is a big problem in metropolitan areas like New York City and Kansas City. Giving subsidies to relocate existing facilities is a net loss for the country and for the region as well. The flip side is that the existence of job piracy makes it possible for companies […]
Republicans seem obsessed with the idea that Obamacare is a failure; that it is a “train wreck” exacerbating unemployment. But is that really so? First of all, the claim that the Affordable Care Act is a job killer flies in the face of reality, as Dan Diamond at Forbes reports: Since the law was signed […]
No sooner do I comment on the difference between tax planning and tax avoidance than Richard Murphy points out that several multinational corporations are having their tax deals looked at for potential violations of the European Union’s state aid rules. As The Guardian and The Wall Street Journal report, there are three cases currently under […]
Over at Tax Research UK, Richard Murphy offers a simple test to distinguish between tax planning and tax avoidance. As he told a journalist, “That is easy. It’s getting legal opinion.” With tax planning, Murphy says, you decrease your tax risk. “There are obvious examples: paying money into a pension, for example, does not create […]
No sooner had I finished my mini-series on evaluating proposed location subsidies then @varnergreg sends me this story about a new copper tubing manufacturing facility opening in one of the nation’s poorest counties, Wilcox County, Alabama. This is clearly the sort of place where I think we should consider using investment incentives, but the sheer […]
In my last post, I discussed one of the most important sets of questions regarding any proposed economic development subsidy: How much does it cost? Is that too much? The answer, assuming that we are not going to overhaul our broken subsidy system overnight, was that we see if we’re paying too much by looking […]
It’s a familiar situation: business and government officials are promoting a new economic development deal which naturally includes subsidies for the investor. They may be touting a consultant’s study touting massive ripple effects and fantastic taxpayer return on investment. Should you believe them? Of course not. Consultants, whether they technically are working for the company […]
Monday, April 21, was 2014 Tax Freedom Day®, according to the Tax Foundation. The Tax Foundation is not exactly known for unbiased research, and its promotion of Tax Freedom Day® is no exception. The Foundation claims that Tax Freedom Day® is “a vivid, calendar-based illustration of the cost of government.” In other words, instead of […]