Fiscal Policy

Dutch Brexit red carpet hastens tax race to bottom

22 Nov 2017

The country’s new government plans to slash corporate taxes and cancel a levy on dividends paid overseas. One reason is to lure multinationals unsettled by Britain’s departure from the European Union. It’s an expensive gamble that makes it likelier other nations will follow suit.

India rating upgrade confirms Modi on right track

17 Nov 2017

Moody's unexpectedly upgraded the country's credit rating for the first time since 2004, in a major boost to Premier Narendra Modi. This recognises that, despite short-term disruption and some negative sentiment, recent reforms will fundamentally improve the economy.

Sorry is the hardest word for central bankers

16 Nov 2017

Bank of England Chief Economist Andy Haldane says rate-setters should speak simply and honestly to the public. The first is easier than the second. Admitting past mistakes or doubts about the present is tough for institutions whose clout depends on an aura of omnipotence.

Hadas: Unintended consequences may be new normal

15 Nov 2017

From Brexit to Donald Trump to Saudi Arabia, the world is full of surprises. But those cheering wrenching change may face further upsets. The UK rejoins the EU, the U.S. president discredits small government, and Saudis become poorer. The next shock may be the rise of dullness.

Japan’s growth streak starts to look shakier

15 Nov 2017

GDP grew an annualised 1.4 pct last quarter, marking the longest unbroken growth run in 16 years. The data is volatile, and often revised, but a global boom appears to be offsetting weaker domestic demand. That underscores the need for further structural reform.

Republican tax plan both sublime and ridiculous

2 Nov 2017

Reducing mortgage and interest deductibility has merit. So do some proposals for simplifying the code. But carried interest is left as is, one of several sops to the wealthy. Ideas on churches, childcare and state taxes look overly political or mean-spirited – and ripe for haggling.

Botched Republican pitch bodes ill for tax cuts

2 Nov 2017

The revised plan only partly deals with criticism it benefits the rich. White House salesmen Gary Cohn and Steven Mnuchin did their own damage by defending cuts for the wealthy and vastly overstating middle-class income. Such poor marketing puts Trump’s economic goals in danger.

Bank of England rate hike has dismal logic

2 Nov 2017

The first increase in UK interest rates for a decade is no grounds for celebration. Rather, it’s an admission that Brexit has permanently lowered the country’s growth prospects. Governor Mark Carney must worry about inflation and a weak currency. The rest is up to politicians.

The Exchange: Mark Meadows

26 Oct 2017

The congressman and chair of the Freedom Caucus thinks neither Republicans nor Democrats have had success in being the governing party. The Exchange went to his office to discuss what that means for tax reform and other issues, and why members of Congress could lose their jobs.

Hadas: Greed is best indicator of financial crisis

26 Oct 2017

New research casts small-time property investors as the secret villains in the 2007 U.S. house price collapse. As usual, the love of leverage was the root of financial distress. Balance sheets are stronger today, but investors still haven’t learned the virtue of moderation.

Banks draw short straw from ECB

26 Oct 2017

The central bank will trim its monthly bond purchases but promised to keep buying for longer. That balances the demands of those who oppose money printing with the wishes of rate-setters who fear growth is still fragile. The losers are banks, whose negative rate pain will endure.

Republican tax-reform hopes have yet to hit reality

24 Oct 2017

A giddy GOP looks set to pass a budget resolution to pave the way for a tax overhaul that the House aims to approve by Thanksgiving. Members haven’t solved their deficit dilemma, though, and President Trump has shot down potential revenue raisers. The hard work is just beginning.

Viewsroom: President Xi Jinping’s moment

17 Oct 2017

The Chinese Communist Party’s 19th National Congress kicks off this week. Delegates at the week-long confab will select new leaders, including for key financial and economic posts. But the spotlight will be on Xi and whether he can consolidate his power and extend his reign.

Breakdown: Narendra Modi’s not-so-bright spot

17 Oct 2017

The premier has called India’s sharp economic slowdown temporary but must be worried about a prolonged slump as state elections approach. Investors are more sanguine. Breakingviews explains how things went wrong, what is at stake, and why India might wait out the pain.

Exchange Podcast: Luke Bronin

12 Oct 2017

Hartford is one of America's poorest cities in one of its richest states. And it's about to get worse for Connecticut's capital as Mayor Luke Bronin wrestles with a fiscal crisis that's likely to end in a bankruptcy filing. Rob Cox dropped in to hear his vision for reviving Hartford.

Hadas: Economists need more psychological abuse

11 Oct 2017

Insights from the study of the mind helped Richard Thaler win the Nobel Prize in economics. The dismal science would benefit from more thoughtful analysis. Rules of thumb could help with investments, statistics would become less alien, while ethics could illuminate big decisions.

Trump’s petty fight upsets art of the tax deal

9 Oct 2017

The U.S. president’s relationship with Republican lawmaker Bob Corker soured further during a Twitter argument. Yet the Tennessean’s support is critical to push tax reform in the Senate, where the GOP has a slim majority. The squabbling endangers a plan that is already under attack.

Hadas: Road to calm finance is unsafe at any speed

4 Oct 2017

A decade after the last financial crisis began, central banks are finally moving to normalise interest rates and money supply. With governments weak and banks and businesses hooked on easy credit, risks are high. There’s a better way to run this system, but few seem interested.

Central bankers’ superpowers are looking spent

2 Oct 2017

Between taming inflation, fighting the financial crisis and averting a breakup of the euro, monetary policymakers acquired an aura of omnipotence. Their responsibilities are growing and their mandates have turned into a fetish. A painful collision with reality is overdue.

White House pins tax cuts on fanciful economics

28 Sep 2017

Presidential adviser Gary Cohn says its costly plan will pay for itself because of the expansion it'll spark. Skepticism is warranted. GDP growth topped 4 pct for a bit following Reagan and Clinton reforms, but the correlation isn’t as strong as the GOP would like to believe.