It’s Not Companies That Should Pay For Government

A certain snigger here as the nations of the European Union tell the European Commission to stuff it over country by country reporting. All of which seems most sensible as the Trump Administration has dealt with the problem anyway in that last revision of the US tax code.

The complaint used to be that the large US tech companies weren’t paying tax anywhere. Now they do, in the US, so that’s all sorted then, isn’t it?…

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More Companies Going Bust Shows How Innovative The Economy Is

Here they’re looking at the way in which bond defaults by corporates has risen in recent decades. That’s a useful proxy for how under stress from new market entrants the old established companies are. That stress has risen. The flip side of that being that we’ve got to be in a pretty innovative economy, things are getting markedly better and quickly. Odd to think of it this way, that more corporate bankruptcies and debt restructurings is a good thing, but that is the way it works:

Disruption and credit markets
Bo Becker, Victoria Ivashina 28 March 2019

In the past 30 years, defaults on corporate bonds in the US have been substantially above the historical average.…

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It’s Twue, It’s Twue, Lower Corporate Taxes Raise Corporate Innovation

This isn’t a great surprise despite the number of people insistent that it doesn’t happen. If you tax companies less then they innovate more. Partly perhaps because they’ve got more money left over with which to innovate, partly because the rewards of innovation are greater as government takes a smaller slice of them. Thus, you know, lower corporate taxation in order to increase the innovation which makes us all richer?

The impact of corporate taxes on firm innovation: Evidence from the corporate tax collection reform in China
Jing Cai, Yuyu Chen, Xuan Wang 17 December 2018

R&D tax breaks are often offered to businesses to encourage innovation.…

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Sigh, The $9 Trillion Corporate Debt Bomb Was The Entire Point Of Quantitative Easing

We have people worrying about the existence of a $9 trillion corporate debt bomb out there. When reality is that the creation of such a high level of corporate debt was the entire point of doing all of that quantitative easing. It’s the very creation of this debt pile that is what was done to lift us up out of that recession, prevented another Depression. Now, not having a Depression may or may not have been a good idea – there are liquidationists out there, Austrian types who think we should just allow that economy to go where it wishes – but this is what the intention was:

A $9 trillion corporate debt bomb is ‘bubbling’ in the US economy

This is what we wanted to happen:

At first glance, it looks like a $9 trillion time bomb is ready to detonate, a corporate debt load that has escalated thanks to easy borrowing terms and a seemingly endless thirst from investors.…

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If Only Matt Yglesias Actually Understood Nordic Corporate Codetermination

We’ve already been somewhat unkind about one aspect of Elizabeth Warren’s Accountable Capitalism Act on the grounds that it shows off Warren’s ignorance concerning the basics of the subject. Now it is necessary to inform another, Matt Yglesias, on how this real world thing works. It is indeed true that the Nordic model of corporate governance is admired and it most certainly seems to be efficient. But it’s not because of workers on the board, it’s not because of this codetermination.…

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