Workers & Economic Inequality

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Not enough taxation and too much representation

TCF fellow, Amy Dean has written an article for AlJazeera America about corporate tax inversions.

In Congress one of the hot issues is what, if anything, to do about corporate inversion, an increasingly popular tax avoidance strategy in which a U.S. corporation acquires a foreign company in order to move its headquarters abroad and pay a lower tax rate on its foreign earnings.

Since 2013, at least 14 U.S. corporations have relocated their headquarters abroad, according to Reuters, with 10 making the move this year alone. The most recent example is Burger King, which announced in late August that it would merge with the Canadian chain Tim Hortons and move its headquarters to Canada, which has a lower corporate tax rate than the U.S. does. That month the U.S. fruit company Chiquita Banana decided to move its headquarters to Ireland. The pharmaceutical company AbbVie moved abroad in June, and Pfizer is contemplating leaving behind its U.S. status.

Read the full article.

Tags: taxes, tax inversions, multinationals, corporate taxes, corporate tax, corporate profit, burger king

Crackdown on Apple in Ireland Opens Front on Tax Avoidance War

TCF fellow Edward D. Kleinbard has been quoted in an article about Apple and tax avoidance on Bloomberg.

The European Commission’s crackdown on the deal between Irish tax authorities and Apple Inc. (AAPL) marks an expansion in the growing global war on tax avoidance by multinational companies. Governments that enable it are now a target.

Yesterday, the European Commission said the Irish tax authorities failed to conform to international guidelines when they “reverse engineered” an agreement with Apple to determine the company’s bills. The Commission also found problems with Luxembourg’s treatment of Fiat Finance and Trade Ltd, and a Commission review of Starbucks Corp.’s (SBUX) taxable profits in the Netherlands is expected shortly.

Read the full article.

Tags: taxes, tax inversions, tax avoidance, ireland, corporate taxes, corporate tax, corporate profit, apple

Why Have Policymakers Abandoned the Working Class?

September 30, 2014 BY: Mark Thoma TOPICS: Workers & Economic Inequality, Economic Policy

TCF fellow, Mark Thoma has written about why policymakers need to pay more attention to the working class, in an article for The Fiscal Times.

The risks associated with a negative economic shock can vary widely depending on the wealth of a household. Wealthy households can, of course, absorb a shock much easier than poorer households. Thus, it’s important to think about how economic downturns impact various groups within the economy, and how policy can be used to offset the problems experienced by the most vulnerable among us.

When thinking about the effects of an increase in the Fed’s target interest rate, for example, it’s important to consider the impacts across income groups. I was very pleased to hear monetary policymakers talk about the asymmetric risks associated with increasing the interest rate too soon and slowing the recovery of employment and output, versus raising rates too late and risking inflation.

Read the full article.

Tags: working class, policy makers, low income, interest rates, inflation, federal reserve, economic policy

Democracy and Good Economics in the Secessionist Movement

Scotland’s near-decision to leave the United Kingdom—and Catalonia’s looming election to seceed from the rest of Spain—are a lesson in austerity economics and the power of dissent. TCF senior fellow Jeff Madrick explains.

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Tags: secession, scotland, economic theory, catalonia, barcelona

What’s so bad about monopoly power?

September 18, 2014 BY: Mark Thoma TOPICS: Workers & Economic Inequality, Economic Policy

TCF fellow, Mark Thoma has written a piece for CBS News about the problems with monopoly power.

Google (GOOG) has been negotiating with European regulatory authorities since 2010 in an attempt to settle an antitrust case concerning its search engine, and its third attempt to settle the case has been rejected.

Google may also face new antitrust problems over its Android mobile operating system, and it's not alone in facing tough antitrust scrutiny in Europe. Microsoft (MSFT) has also been the subject of a long-running battle in Europe over market dominance issues.

But what's motivating this scrutiny from European regulators? What's so bad about a company amassing monopoly power?

Read the full article.

Tags: monopolies, google

Holder calls for bigger rewards for whistleblowers

TCF fellow, Robert C. Hockett has been quoted in a CBS News article about rewarding whistleblowers.

U.S. Attorney General Eric Holder today called on Congress to provide bigger financial rewards to Wall Street whistleblowers, arguing that the current payoffs are too small to entice executives to provide evidence against their employers who have committed wrongdoing. He is hopeful that such cooperation would lead to criminal cases connected to the financial crisis.

Under The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), which deals with fraud committed against investors, whistleblower awards are capped at $1.6 million. Holder argues that is a "paltry sum" for a highly paid financial services executive who is aware of illegal activities to report them to the government. He wants FIRREA's awards to be more in line with the False Claims Act under which whistleblowers are entitled to up to one-third the settlement amount.

Read the full article.

Tags: whistleblowers, whistleblower, attorney general eric holder

 

Workers & Economic Inequality

Workers & Economic Inequality

In recent decades, and especially since 2000, the richest Americans have enjoyed soaring income and wealth while the rest of the population's living standards have stagnated. The Century Foundation was one of the first institutions to raise serious concerns about these trends and propose ideas for improving economic conditions for all Americans- not just the fortunate few.

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