Tax

UK growth fix can start with pampered rich savers

19 Jul 2024

New Prime Minister Keir Starmer wants to unblock Britain’s dismal economy. One aid would be to raise revenue by cutting superfluous tax perks for wealthy savers. Another is to find a way to deploy UK savings in more growth-enhancing assets than is currently the case.

New UK government can claim competence dividend

2 Jul 2024

Eight years of political upheaval and economic uncertainty raised the risk premium for investors. Now the centrist Keir Starmer is set to take over, while France and the US face electoral turmoil. For the first time since the Brexit vote, the country looks a relative safe haven.

French left is too divided to soak the rich

27 Jun 2024

France’s leftist parties have vowed to lift wages and control prices if they win the upcoming election. That would cost 150 bln euros and be funded by higher taxes on the wealthy. Yet fierce splits between moderate socialists and hardliners mean the well-to-do can rest easy.

French cracks show up Italy’s messy fiscal house

19 Jun 2024

Investors fear Paris’s financial laxity. Yet, after wasting $235 bln on tax credits for home improvements, Rome’s finances are also shaky. EU funds will help offset the phasing out of incentives. But with weak growth and nervy markets, cutting debt is both harder and more needed.

China’s value push may bridge a Hong Kong gap

12 Jun 2024

The yawning premium of onshore stocks to their offshore equivalents is easing. A push by top market regulator Wu Qing for higher dividend payouts and Chinese investors' anxious hunt for yield could further narrow the gap. Watch out for more southbound buying.

A confident India can afford to squeeze investors

21 May 2024

Finance Minister Nirmala Sitharaman dismissed reports the government, if re-elected, will majorly alter how asset sales are taxed. There is merit to the idea, however. It could help deepen the $550 bln corporate bond market. The buoyant rally in stocks provides an opportunity.

Anglo breakup costs complicate a sweeter BHP deal

1 May 2024

The miner’s Australian suitor is mulling a hike to its $39 bln proposal. But if Anglo American were to demerge its listed South African units as part of the deal, BHP or any other buyer might inherit a $2 bln tax bill. That may limit BHP boss Mike Henry’s scope for generosity.

EU bank-saving raid can boost tired capital market

17 Apr 2024

European households have 33 trln euros of rainy-day cash, but not much invested in equities. Former Italian PM Enrico Letta reckons savers could fund the green transition if they had access to better stock funds. Forcing countries to lower tax and other barriers would help.

Odd Washington deal creates anti-M&A synergy

28 Mar 2024

Senators on opposite ends of the political spectrum are joining forces to stop stock swaps like Capital One’s $35 bln Discover deal from being tax-free. The proposal probably wouldn’t generate much revenue. It does, however, build on the movement against corporate concentration.

Lower taxes would cripple Europe’s growth

26 Mar 2024

The bloc needs new public investment of about 3% of GDP for the green transition, defence, infrastructure, education and health. High debt loads limit borrowing and spending cuts hurt the economy. Instead of pledging lower levies, governments have to raise them.

UK ‘non-dom’ slap is right move for wrong reason

6 Mar 2024

Finance minister Jeremy Hunt scrapped tax benefits for people living in the UK but officially domiciled abroad. That improves fiscal fairness and may raise over $3 bln per year. But the benefits are uncertain and the funds went to pre-election giveaways, not public services.

Excessive UK tax giveaways risk longer-term harm

5 Mar 2024

Finance minister Jeremy Hunt may spend some 15 bln pounds in pre-election fiscal gifts in Wednesday’s budget. He could be tempted to do more – and make life difficult for the next government – by further cutting public services. But that would put the country in a bind.

Russia risk looms over Euroclear profit windfall

22 Feb 2024

The Brussels-based clearing house is a reluctant depository for sanctioned Russian assets. It made 5.7 bln euros before tax last year thanks to cash sitting on its balance sheet. But the bonanza also makes it a target. A blow to financial stability would far exceed one-off gains.

Britain is case study in death-duty dysfunction

24 Nov 2023

UK politicians have been mulling inheritance tax tweaks. Death duties are good policy, but the British version is beset with exemptions that favour wealthy landowners and pensioners. Given the problem may worsen, there’s logic in cherry-picking from better approaches overseas.

US deficit problem screams for revenue solution

23 Oct 2023

Rising interest costs threaten to widen a $1.7 trln budget gap already stretched beyond 7% of GDP. Lawmakers are haggling about spending, but the math only works with higher taxes. It means closing an inheritance loophole, charging the rich more and resetting the corporate rate.

Microsoft becomes unwitting fiscal honeypot

12 Oct 2023

A $29 bln back-tax bill amounts to 40% of the tech firm’s yearly earnings. It’s also enough to fund a new round of Ukraine aid, two years of tax collection or a decade of substance abuse treatment. Uncle Sam may lose the fight, but when budgets are tight there’s more to play for.

Big Four scandals will derail breakup plans

5 Oct 2023

EY and PwC are dealing with issues in their tax and consulting units. In this Viewsroom podcast, Breakingviews columnists explain how falling valuations of rivals like Accenture as well as questions about the stability of consulting fees will mean these firms may stick together.

PwC Aussie mess is classic do as I say not as I do

29 Sep 2023

An independent review sparked by a tax-leak scandal lays bare governance failures at the advisory firm including an overly powerful CEO, a supine board, poor risk processes and, ironically, an aversion to external help. Fixing those is just the start of the company's turnaround.

Republican hopefuls’ deficit goals are all talk

24 Aug 2023

Conservatives vying for the Republican nomination vowed to slash the deficit in a debate. After years of spending under conservative leadership, it’s a throwback. Yet tax cuts and other costly projects are still key talking points. Worsened US finances make the agenda impossible.

DeSantis chose wrong Disney battle, right war

22 Aug 2023

Homing in on the $157 billion entertainment company was politically foolish. But the Florida governor is right that Disney's sweetheart deal doesn't make sense. Other similar arrangements are finite and fairer, and still end up bad for states' finances.