Mankiw on Inversions — I agree 100% — One Way to Fix the Corporate Tax: Repeal It
"If tax inversions are a problem, as arguably they are, the blame lies not with business leaders who are doing their best to do their jobs, but rather with the lawmakers who have failed to do the same. The writers of the tax code have given us a system that is deeply flawed in many ways, especially as it applies to businesses."
From Kenneth Rogoff, reviewing Piketty on Project Syndicate
My emphasis in bold
Alternative steps (to Piketty) to reduce inequality within the U.S. -
“There are many practical policies that can be adopted to reduce inequality, in addition to a progressive consumption tax. Focusing on the US, Jeffrey Frankel of Harvard University has suggested the elimination of payroll taxes for low-income workers, a cut in deductions for high-income workers, and higher inheritance taxes. Universal pre-school education would enhance long-term growth, as would a much greater emphasis on lifetime adult education (my addition), possibly via online courses. Carbon taxes would help mitigate global warming while raising considerable revenues.
Where Rogoff disagrees with Piketty -
"In accepting Piketty’s premise that inequality matters more than growth, one needs to remember that many developing-country citizens rely on rich-country growth to help them escape poverty. The first problem of the twenty-first century remains to help the dire poor in Africa and elsewhere. By all means, the elite 0.1% should pay much more in taxes, but let us not forget that when it comes to reducing global inequality, the capitalist system has had an impressive three decades.”
He took the a-typical path for someone fascinated with finance. It wasn’t the most lucrative, but it was an intellectual roller-coaster. He devoted himself to public institutions and the functioning of global markets, ran the world’s largest portfolio, and after 25 years he’s going to work in global private equity where he can apply what he learned in a different way.
Is that a bad thing? Evidently, some people think so.
In August, Moody’s Investor Services stated that they were reviewing the credit ratings of large banks in order “to reflect the impact of US bank resolution policies.” Moody’s competitor S&P has already made these changes.
This past week, Moody’s finished their review by downgrading the likelihood of government support, stating, “Today’s rating actions reflect strengthened US bank resolution tools, prompted by the Dodd-Frank Act, which affect Moody’s assumptions about US government support.”
While financial markets already priced in regulatory changes associated with Dodd-Frank – changes that make bank failure less likely and failure less messy – critics often pointed to credit ratings to state that big banks were receiving an implicit subsidy (valued at $83 billion), in a large part because this was the only methodology that stated there was one.
With these changes, no matter what methodology one uses, no “implicit TBTF subsidy” exists.