Month: October 2015

We’re Doing Great! Send Help – Quick!

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This morning the Royal Swedish Academy of Sciences announced the award of the 2015 Nobel Memorial Prize in Economic Science to Princeton University economist Angus Deaton.  In describing his work, The New York Times reports on a tension that Deaton sees in the history of economics – that we are at a time of almost unprecedented prosperity or good fortune, and yet, threats which could demolish those successes are right around the corner – e.g.: climate change and inequality.  Slate also noted Deaton’s work and writings on inequality, particularly his observation that unequal outcomes could necessarily mean unequal opportunity in the first instance. The Upshot column in The New York Times delves further into Deaton’s work, notably his emphasis on empiricism, yet cautions that the Nobel laureate has never advocated that data replace theory – rather, they work together to craft solutions to economic problems, specifically those related to development.  A worthwhile and accessible read.

Volkswagen – Emissions and Taxes

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By now, you’ve doubtless heard that Volkswagen installed software in its diesel cars that was designed to defeat American emissions tests.  For car owners, environmentalists, governments, autoworkers, and countless others, the scandal has reverberated throughout the world.  Civil suits are piling up, criminal inquiries have opened – even Texas has gotten in on the game. Transportation regulators, consumer regulators, environmental regulators – all seem to have jurisdiction.  Add one more arena where the embattled German automaker will face scrutiny – taxes. The U.S. Senate Finance Committee, led by Chairman, Sen. Orrin Hatch (R- Utah) and Ranking Member Ron Wyden (D-Ore.), sent a letter Tuesday to Volkswagen Volkswagen AG and Volkswagen Group of America, inquiring about tax violations committed by the automaker and its divisions as it installed the pernicious software. Taxes?  But it’s a tech problem, an environmental problem, a public health problem.  Yep.  It’s all of those things.  And because the United States – in its frontier, self-reliant mentality – rather than actually pay for various programs outright, incentivizes various behaviors by running refunds and …

We’re Here, Even If Tax Revenues Aren’t

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In various European countries, August is not a month to work but to go on holiday. In that spirit, we also took a holiday in August. And September.  And nearly October, but we’re about ready to emerge from tax season and get back to the business. Two articles caught our attention today.  The first concerns corporate taxes.  Reuters is reporting on a study that estimates just how much American companies use offshore accounts and other vehicles to mitigate tax bills.  Details aside, the big takeaway is probably this: “The 500 largest American companies hold more than $2.1 trillion in accumulated profits offshore to avoid U.S. taxes and would collectively owe an estimated $620 billion in U.S. taxes if they repatriated the funds, according to a study released on Tuesday.” If you happen to be one of those companies, or a major shareholder, and you do repatriate that income, and your holdings take a hit, remember you can effect some savings to your bottom line by selecting where you live.  Not all states are equal in …