Tax

Tax cuts are looking like rare Trump win

19 Jan 2018

The U.S. president’s first anniversary coincides with a possible federal funding hiatus. Slashing corporate taxes last month was a GOP success and the administration now wants infrastructure investment. But the shutdown wrangling is indicative of the partisan deadlock to come.

Amex is a rare real victim of U.S. tax cuts

18 Jan 2018

The $86 bln charge-card group took a big hit from December’s tax revamp. Unlike at other financial firms, its capital ratios fell below acceptable levels. Suspending buybacks to rebuild the cushion makes sense, but it will delay the benefits of the new low-tax regime.

Gasoline tax is obvious infrastructure piggy bank

18 Jan 2018

The U.S. Chamber of Commerce wants a 25 cents-a-gallon increase to raise $400 bln for investment in transportation. It seems a contrary proposal coming from a group whose members just secured huge tax cuts. But it makes sense: American gas is cheap, and a higher levy is overdue.

Tim Cook goes as American as Apple’s pie

17 Jan 2018

The iPhone maker will pay $38 bln in tax on its huge pile of overseas cash. It’s also pulling an Amazon with plans to open a new U.S. campus, invest $30 bln and create 20,000 jobs. The Apple boss has cleverly engineered some common ground with Donald Trump.

Citi investors go through the tax looking glass

16 Jan 2018

U.S. tax cuts pushed the lender into an $18.3 bln loss, but should boost future earnings. That means boss Mike Corbat can be more ambitious about recently set growth targets. Citi’s recovery may be driven largely by forces beyond its control, but that’s not always a bad thing.

Scrapping UK bank levy is easy post-Brexit win

16 Jan 2018

As Britain leaves the European Union, the UK government is eager to persuade lenders to stay in London. But watering down regulations would risk irking Brussels. Getting rid of the surcharge on banks' balance sheets would be a simpler way to dust down the welcome mat.

Wall Street banks need yet another earnings metric

12 Jan 2018

JPMorgan, Wells Fargo and peers already deluge investors with performance measures. But tax cuts will make it easier for them to hit returns targets – and for executives to claim bonuses despite mediocre growth. Pre-tax returns on equity would be a helpful alternative yardstick.

Walmart pay hike is less than largesse

11 Jan 2018

The $300 bln U.S. supermarket chain is raising hourly wages by $300 mln. That’s just a sliver of what it could save through tax cuts, but that may not be the biggest driver anyway. In fact, with super-low unemployment, it’s a wonder Walmart can get away with so little.

German economic success lays trap for Merkel

11 Jan 2018

The strongest growth in six years and the rude health of public finances may tempt a weakened Chancellor Angela Merkel into budget giveaways. But low interest payments flatter the fiscal picture and won’t endure. Better to invest in infrastructure and education than to cut taxes.

Hadas: Fiscal debts are not our children’s burden

10 Jan 2018

When this generation dirties the water, the next has to pick up the tab. Debt is different. When governments borrow from taxpayers, the children will both pay the bill and enjoy the proceeds. The real deficit dangers lurk in foreign debt and distributional distortions.

Duterte’s infrastructure push needs more than cash

2 Jan 2018

A new revenue-raising tax bill will help Philippines President Rodrigo Duterte pay for a “golden age of infrastructure” to increase competitiveness and living standards. The challenge will be to deploy the proceeds efficiently and without fostering corruption.

Goldman loses on tax swings, gains on roundabouts

29 Dec 2017

President Trump’s tax reform will knock $5 bln off the Wall Street firm’s bottom line, two-thirds of it from a one-time hit to foreign earnings. That’s just noise for investors to filter out. Other goodies, like a lower overall rate, should leave Goldman substantially better off.

Trump tax cut is sack of coal for foreign banks

29 Dec 2017

The U.S. president says reduced corporate taxes are a Christmas present. But a levy on interest payments to overseas companies could hit lenders with U.S. subsidiaries. The provision, the base erosion and anti-abuse tax, might even cancel out the benefit of a lower headline rate.

U.S. buyback surge will incinerate wealth in 2018

28 Dec 2017

Companies will get a windfall from Republican tax cuts and repatriated profits. The White House claims the money will spur jobs and wages, but a similar Bush policy mostly fueled share repurchases. If GE’s experience is any guide, the largesse will burn value on a grand scale.

Xi’s tighter grip will tax Chinese real estate

26 Dec 2017

The president will sideline traditional policy shops, in particular the Ministry of Finance, and assign policymaking to opaque smaller groups. That will accelerate some reforms, in particular the long-discussed national property tax, which could squeeze the housing market.

Tax cuts crystallize haves, wants, can’ts, won’ts

21 Dec 2017

AT&T, Comcast, Boeing and Wells Fargo are among companies sharing the wealth from lower levies with workers. Most have reason to curry favor with the White House. So such deals may be less than they seem – while others will struggle to hold on to any benefits at all.

Cox: Is Wall Street more democratic than America?

20 Dec 2017

Taxpayers in the most productive U.S. states would be forgiven for asking the question after the way Congress treated them with a slapdash tax bill skewed to corporations, not people. The big risk is that while capitalism becomes more representative, America goes the other way.

How to know if America’s big tax bet pays off

20 Dec 2017

Republican lawmakers have passed revised tax cuts that give even more breaks to companies and the wealthy. They are banking on those benefits trickling down to average workers. It could come back to haunt them. Breakingviews notes a few ways to measure the policy’s success.

People vs. companies tax bill shafts U.S. expats

14 Dec 2017

Businesses are awash in riches in the Republican plan. Besides cutting the corporate rate, GOP lawmakers want to impose taxes based on where income is earned. But some 9 mln Americans working overseas won’t get that benefit. It’s another instance of corporations trumping humans.

Japan’s creative pay push contains mismatch flaw

15 Dec 2017

A fresh tax-rate cut rate gives employers an incentive to raise worker wages and invest in factories. The link recognises the folly of trusting companies to use a windfall to spread the wealth. One big hitch in the plan is that the corporate cost will far outlast the benefit.