Tax Analysts Blog

Monday, December 7, 2009
In dire need of cash and politically palatable tax cuts, U.K. politicians are looking at new taxes on banks. According to reports from many sources -- including the BBC, the London Times, the Financial Times, and Bloomberg -- the soon-to-be-released U.K. Pre-Budget Report may include a one-time win...
Monday, December 7, 2009
Households with incomes over $1 million paid income tax equal to 22.1 percent of their adjusted gross income in 2007. This is down from 23.4 percent in 2004. And from 30.8 percent in 1996. See the chart below. The 2007 data were just released by the Statistics of Income Division of the IRS. The mai...
Wednesday, December 2, 2009
If there is another financial crisis no one can claim they were not warned. In the minutes of its November Federal Open Market Committee meeting, some board members worried about "the possibility that some negative side effects might result from the maintenance of very low short-term interest rates...
Monday, November 30, 2009
As Jackie Calmes reports in this morning's New York Times, a top priority for this Congress is to extend unemployment benefits before year end. For millions of families that depend on these benefits this will be welcome holiday news. But not all recipients of unemployment benefits deserve our sympa...
Monday, November 23, 2009
No less than four articles in this morning's papers discuss rising risks on debt issued by governments of developed nations. In the Wall Street Journal you can read ("EU's Weakest Draw New Scrutiny") about the rising cost of insuring debt issued by the struggling Irish and Greek governments. This i...
Friday, November 20, 2009
The Financial Times' Martin Wolf is one of the world's best and most influential economic columnists. He is no liberal. I would label him a cautious pragmatist. So today when he argues for a windfall profits tax on banks we cannot dismiss his idea as the product of knee-jerk populism or partisan po...
Thursday, November 19, 2009
One reason the Democrats need to finish health care reform this year is that starting in January, the Administration will begin its big push on deficit reduction. January is the State of the Union address. February is the release of the budget. In the first Obama budget the stated goal was cutting...
Tuesday, November 17, 2009
Nobody likes the sound of a "weak" dollar. But it provides the economy with a lot of benefits. Most importantly, it makes U.S. exports cheaper for foreign purchasers--boosting U.S. trade. This is why U.S. manufacturers and their employees are mad as hell that China does not allow its currency to ap...
Tuesday, November 17, 2009
In the late 1980s Ways and Means Chairman Dan Rostenkowsi proposed a bill that would limit tax deductions for interest on debt to finance corporate takeovers. That bill died when the market crash of 1987 scared Congress away from any get-tough policies on Wall Street. But scandal and overreaching e...
Friday, November 13, 2009
To save the economy from collapse the Fed has printed money and cut interest rates like never before. But the benefits of this policy are not spread evenly over the economy. Two columns in today's papers make this point. In the Financial Times, Samuel Brittan writes:"Unfortunately, instead of being...
Tuesday, November 10, 2009
Professional politicos always enjoy putting down academic-types who dare to dabble in policy. Quoted in today's New York Times on the subject of health care reform, the White House Chief of Staff had these words of wisdom: “The goal isn’t to see whether I can pass this through the executive board...
Monday, November 9, 2009
Instead of just huffing and puffing, Congress may be getting serious about deterring offshore tax evasion. Building on years of groundwork by Senator Carl Levin, House Ways and Means Committee Chairman Charles Rangel (who himself has been caught evading taxes in an offshore jurisdiction) and Senate...
Friday, November 6, 2009
As Charlie Gasparino explains ("Three Decades of Subsidized Risk") in today's Wall Street Journal, Fed-subsidized rock-bottom interest rates and implicit government guarantees for those too big to fail fueled a corporate borrowing binge that almost brought the U.S. economy to its knees. The tax bia...
Monday, November 2, 2009
Like a tractor trailer stuck at a railroad crossing, the House health care reform bill sits on the track waiting for the Senate freight train to come smashing through. Ideologues of both parties want you to believe the big issue is the fate of the public option. But the real battle, as usual, will...
Tuesday, October 27, 2009
"I am fully convinced that not only the year 2010 but also the year 2011 will be strongly marked by this crisis." With these words German Chancellor Angela Merkel announced the start of her new fiscal program. At the core are big tax cuts and spending hikes. Never mind the high levels of public de...
Friday, October 23, 2009
You have cause to be worried. The Dow is rallying but nobody is feeling good. And we're not just talking about the pain felt by the nation's 15.1 million unemployed and the anxiety of all those who fear they might be next. Two articles in this morning's papers should make even elite capitalist inve...
Tuesday, October 20, 2009
On a twin-screw powerboat you can spin your vessel endlessly around its pivot point by putting one engine in forward and the other in reverse. You get nowhere and you look ridiculous. Unfortunately America's fiscal policy has one engine in forward and one in reverse. We want to increase the deficit...
Thursday, October 15, 2009
When Congress passed its latest farm bill in 2008, it included a new $1.01 per-gallon tax credit for ethanol produced from cellulose. The intended beneficiaries of the $1.01-per-gallon credit were companies that use expensive, cutting-edge technologies to distill ethanol from plant materials inste...
Tuesday, October 13, 2009
Economists have faith in the marketplace but once in a while some heretic will express doubts on its infallibility. Oliver Williamson, co-winner of this year's Nobel prize in economics, is no radical. But the life work of the 73-year old UC Berkeley professor shows how transaction costs and lack of...
Monday, October 12, 2009
Many years ago I worked in the private sector in one of the most lucrative areas of tax consulting: transfer pricing. By adjusting transfer prices -- for example, by raising prices paid by a U.S. parent company for products from its subsidiary in low-tax Ireland -- a multinational could save a fort...