Tax

Companies bear brunt of Britain’s fiscal trade-off

30 Oct 2024

New finance minister Rachel Reeves raised 40 bln pounds through higher levies, mostly on employers, to fund public services like health. She also changed debt rules to borrow more. It’s a bet that fiscal rectitude will help revive growth. But the ailing UK has few other options.

Voters and markets put left-wing leaders in a bind

29 Oct 2024

The world must reduce debt by 3.8% of GDP by 2029 – four times more than planned – the IMF says. That’s bad news for social democratic governments, which lose elections when they are fiscally tough. But if they keep running chunky budget deficits, investors will make them pay.

Debt rule tweak can help UK avoid moron premium

25 Oct 2024

Two years ago, former Prime Minister Liz Truss’ unfunded tax cuts sent 10-year gilt yields surging to 4.5%. Now, new Chancellor Rachel Reeves can avoid a similar debacle with small changes to the fiscal rules in next week’s Budget. With yields at 4.2%, there is no room for error.

UK budget is a tightrope walk over a black hole

24 Oct 2024

Finance Minister Rachel Reeves is due to set out tax and spending pledges while hemmed in by campaign promises and economic reality - even if debt rules are tweaked. In this Viewsroom podcast, Breakingviews columnists discuss the tall task of selling it to the public and markets.

Trump stumbles onto a useful globalist policy

22 Oct 2024

The protectionist presidential candidate floated an exemption for 4.4 mln US citizens living abroad from paying some $12 bln of income tax at home. It would streamline an unwieldy patchwork system for expatriates. And if structured properly, it might even help prevent evasion.

UK’s bad tax on share trading looks hard to kill

18 Oct 2024

Britain’s stamp duty on equity transactions hampers and distorts investment. Yet abolishing it probably won’t revive the fortunes of the country’s shrinking stock market. Chancellor Rachel Reeves has little cash to spare, and cheaper ways to boost domestic share ownership.

Measured UK tax hike can avoid dealmakers’ Brexit

16 Oct 2024

Chancellor Rachel Reeves has to raise money in her Oct. 30 Budget and may up capital gains tax from 28% to 35%. That would require 2,000 buyout barons to pay $120,000 extra on their funds’ profits. Such a small hit would probably stave off a threatened private equity exodus.

UK tax threat revives gambling stocks’ M&A saga

14 Oct 2024

Entain and Evoke shares fell over 10% on reports of a 3 bln pound tax hike on the sector. After a troubled few years in which it was a target for MGM, debt-laden Entain had looked on the mend. If Britain turns the fiscal screw, smaller players may need to bulk up.

France heads toward aimless short-term austerity

11 Oct 2024

PM Michel Barnier’s deficit-reduction plan mostly relies on 30 billion euros of tax hikes next year. That will hit growth just as corporate investment and consumer demand are flat. Long-term spending cuts would be a better solution. But this weak government cannot provide them.

UK government can still trip over lower fiscal bar

11 Oct 2024

Chancellor Rachel Reeves needs an extra 31 bln pounds in public investment by 2029 to boost the country’s anaemic growth. Easing the spending rules is a start. But without a clear plan and return targets, the Labour administration will fall into a debt trap of its own making.

Ireland spins global tax mess into $28 bln of gold

8 Oct 2024

Dublin expects a 2024 budget surplus worth 8% of gross national income, thanks to the presence of US companies lured by low levies. It’s evidence that profit shifting lives on despite a landmark OECD deal. The good news for Ireland is that there’s little chance of that changing.

French PM has a plan but lacks time to fix budget

4 Oct 2024

Michel Barnier is proposing 30 billion euros of spending cuts and tax hikes to shrink the country’s deficit. Even if a divided parliament approves, he will have to repeat the feat in future years to fill the fiscal hole. This government’s weak hold on power makes that unlikely.

New UK government is mired in unreal vibecession

2 Oct 2024

After winning the election, Labour leaders repeatedly warned of financial pain ahead. That helped drag consumer confidence to a six-month low in September. The economy is actually improving but this month’s budget will have to raise both much-needed money and rock-bottom morale.

Kamala Harris’ economic plan bows to realities

27 Sep 2024

Unlike Biden's crisis-sized agenda, Harris faces fiscal headwinds and divided government - if she manages to win. Promises of tax credits for small businesses and families, along with a deal on taxes with Republicans, are the most she's promising, and most she can deliver.

Trump lays out gluttonous tax-break smorgasbord

25 Sep 2024

The US presidential candidate has floated an array of handouts for all. His latest giveaway: unwinding the same cap on state and local deductions that he himself enacted. Add exemptions on worker tips, overtime and Social Security, and the sum exceeds $7 trln of fiscal ruin.

Defeating tax taboo is scary task for French PM

19 Sep 2024

France’s new Prime Minister Michel Barnier wants to slash the deficit from 6% of GDP and reduce the debt burden. A fiscal squeeze would work but parliament is clamouring for the opposite and President Emmanuel Macron is also against it. The premier’s tenure may be short-lived.

Ireland can use unwanted taxes to keep Apple sweet

10 Sep 2024

Europe’s top court told the iPhone maker to pay $14 bln in corporate levies. Dublin opposed the move for fear of driving away Big Tech. But PM Simon Harris can up the country’s allure by spending the funds on infrastructure, and IT giants have limited choices for EU headquarters.

Trump’s super-tariff is dangerously simple

9 Sep 2024

Slapping up to 20% on all imports, and triple that on Chinese goods, is easy to understand, and to implement. The consequences, though, are complex and likely to be mostly harmful. The best hope is that this bad idea, intended to boost US prosperity, leads to some better ones.

Dueling US tax ideas miss $4 trln elephant in room

15 Aug 2024

Both leading presidential campaigns have floated exemptions for tip income and higher credits for parents. Donald Trump also wants to move Social Security checks out of Uncle Sam’s reach. Such populist pitches pale next to expiring 2017 cuts, which will anchor the policy debate.

UK’s half-empty fiscal glass is slowly filling up

30 Jul 2024

Finance minister Rachel Reeves announced public spending cuts to fill a 22 bln pound hole left by the old government and raise pay for teachers and doctors. She will also need to hike taxes. But a better financial picture in future years tempers her gloomy narrative.