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Yearly Archives: 2016

Corporate Taxes

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What is a fair corporate tax? It’s a hot political topic, but one loaded with a tremendous amount of mis-information. On the left, it’s common to cite “loopholes” which allow corporations to “offshore” profits and dodge taxes as a result of corporate lobbying. On the right, the extremely high corporate tax rate of 38%, nearly double the worldwide average, is cited as a major problem.

Both statements are greatly limited at best. US corporate tax law does not contain “loopholes” but a series of structural deficiencies derived primarily from being hopelessly antiquated. Any discussion of the tax rate misses the main issues entirely, as the definition of “profit” – more accurately, definition of “income” and “expense” – is the core issue.

Any reasonable discussion of corporate taxes has to start with the fundamentals. What is a corporation? What is profit? Who benefits? What needs to be done?

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About Those E-mails …

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Today was a big day for campaign news, in that nothing happened. Clinton was not indicted for her mis-handling of emails, nor did we learn anything new. It’s all over but the ranting, so we’ll pause for a moment so that you can get your share in.

[ shouting, sharing of angry memes, deep sighs, et cetera ]

Feel better? Be sure to wipe off the screen when you’re done. Because whether you believe this was purely one more witch hunt or evidence of a rigged system, you probably are better off getting it off your chest. Better in the sense that you’re probably wrong – there was something to this, but it was never going to end up in an indictment.

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Fly the Flag

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For Independence Day, I can never do better than this old story I love to retell as often as I can.  Enjoy the holiday!

The misunderstandings and suspicions melted away, as they always do, after a few litres of liquid bread that the Germans call “Bier”. Harald was very honest in his German way, a kind of honesty that was spelled out in long, silent pauses as much as words. “With all of these different people and cultures, what is it that makes you Americans?”

I swallowed my beer to give me time, and the perfect answer came to me:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

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The Star Spangled Banner

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Many Americans think that we play “The Star Spangled Banner” at the start of baseball games because it is our National Anthem. In reality, it is our National Anthem largely because it was played at the start of baseball games.

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Big Ideas Fall Apart

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The dust continues to settle after the Brexit earthquake. US markets stabilized today, but it appears to be a “dead cat bounce” or a technical upturn as short positions are covered. It comes from the saying that even a dead cat will bounce up one story after falling off a ten story building. It certainly feels like that kind of week, especially if you think about whatever dead animals might account for the ridiculous hair of Donald Trump and/or Boris Johnson.

Then again, it hasn’t been a week yet.

For all the comparisons between this vote and the Trump phenom, they still don’t do this situation justice. People all over the world are recoiling from opening up markets and generally moving closer together. The threat to the EU is far from done as “euroskeptics” on the continent will certainly be emboldened – as will globalskeptics around the world. What has gone wrong?

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