The British vote to leave the European Union was motivated by several factors and in nearly two-thirds of the seats held by the Labour Party (and in no less than four-fifths of those located in the North of England and the Midlands) a majority of voters voted to leave the EU − but across Britain as a whole, 63% of those who voted Labour in 2015 and who cast a ballot in the EU referendum, voted to Remain.
The Economist was more specific on how immigration impacted the vote: "Where foreign-born populations increased by more than 200% between 2001 and 2014, a Leave vote followed in 94% of cases. The proportion of migrants may be relatively low in Leave strongholds such as Boston, in Lincolnshire (where 15.4% of the population are foreign-born). But it has grown precipitously in a short period of time (by 479%, in Boston’s case). High levels of immigration don’t seem to bother Britons; high rates of change do."
Last December, Mark Carney, governor of the Bank of England, recalled in a speech in Liverpool when “it was in the midst of a golden age; its Custom House was the national Exchequer’s biggest source of revenue. And Karl Marx was scribbling in the British Library, warning of a spectre haunting Europe, the spectre of communism. We meet today during the first lost decade since the 1860s.”
Last month the Institute of Fiscal Studies, Britain’s leading financial think-tank, said that in 2008, the median worker in the UK (i.e. the person for whom half of workers earn more and half earn less) working full time had an annual salary of £24,500 in today’s prices. Today, a decade later, the median worker working full-time earns £23,000, still £1,500 below the pre-crisis level.
“A decade without the nation’s workforce getting a pay rise is extremely disappointing, but the forecasts now imply that sluggish increases could be the new normal. Real wages are due to be flat next year, and even in 2022–23 average earnings are due to be below where they were in 2007–08. That implies a lost decade and a half of wage growth, an unprecedented period of stagnant earnings in the UK.”
OECD data on average earnings for a full-time or full-time equivalent employee, show that among rich countries, the UK, Italy, Greece and Iceland had lower levels in 2016 compared with 2007.
Mark Carney spoke of “the disconnect between economists and workers. The former have not been sufficiently upfront about the distributional consequences of rapid changes in technology and globalisation. Amongst economists, a belief in free trade is totemic. But, while trade makes countries better off, it does not raise all boats; in the clinical words of the economist, trade is not Pareto optimal. Rather, the benefits from trade are unequally spread across individuals and time. Consumers get lower prices and new product varieties, and, overtime, benefit from the spur to innovate and higher productivity. Some workers, however, lose their jobs and the dignity of work, or see their ‘factor prices’ – in plain English, wages – equalised downwards.”
What is good for London may not be for a depressed region in the North of England. The cost of housing in the capital city does not promote mobility.
People who work in areas of the US most affected by imports typically have greater unemployment and reduced income for the rest of their lives, according to research led by David Autor, a professor at the Massachusetts Institute of Technology (MIT). However, overtime automation has had a far bigger effect than globalization and would have eventually eliminated those jobs anyway.
“Some of it is globalization, but a lot of it is we require many fewer workers to do the same amount of work,” he said. “Workers are basically supervisors of machines.”
More than half Irish indigenous exports go to 4 Anglo-Saxon countries
Ryanair’s annual revenues in the 12 months to March 2017 were at €6.65bn. According to Enterprise Ireland indigenous tradeable exports in 2016 to Europe-excluding UK, Africa, Middle East, Russia, Central Asia and India, were valued at €6.95bn. UK exports were at €7.75bn and to US/Canada were at €3.74bn.
In 1973 when we joined the EEC about 55% of total exports went to the UK. Today the same ratio of indigenous exports go to 4 Anglo-Saxon countries: UK, US, Canada and Australia.
Even though there are more direct jobs in indigenous exporting firms, 201,100 at end 2016, compared with 199,900 in IDA Ireland foreign-owned (FDI: foreign direct investment) exporting client firms, it’s striking that the onset of Brexit has not focused attention on the narrow base of indigenous firms. The main attention of policymakers has been on getting ready-made jobs from US firms and these firms are also the target of the big Irish professional firms.
Both the FDI and indigenous sectors are not engaged in significant innovation.
Ireland’s individual material standard of living is similar to Italy’s while in contrast, Denmark is a high-wage knowledge economy.
See more here on indigenous trade; the small number of exporting firms; lack of language skills etc. and how Denmark, which in the 1950s was also highly dependent on agricultural exports, evolved to be a high-wage knowledge economy:
Irish myth of ultra-low French effective corporate tax rate
Source: US Congressional Budget Office
Click image for bigger size
Since the Irish international economic rescue year of 2010 when Nicolas Sarkozy, then French president, suggested that the low Irish headline corporate tax rate of 12.5% should be raised, it has been commonly believed in Ireland that the French were hypocrites because they had even a lower effective rate than Ireland's, based on actual tax paid as a ratio of reported taxable income.
The 'Paying Taxes' annual report that is produced by PwC, the Big 4 accounting firm, for the World Bank, showed in that year that France had an 8.2% effective rate compared with Ireland's 11.9%.
Both these rates were misleading.
The 2016 national average effective rates of corporate taxes of 0.4% for France and 12.4% for Ireland, cited in the September 2017 Comptroller and Auditor General (C&AG) of Ireland's report, do not reflect the reality for multinational firms. The claims made are very misleading and the French data are false.
Based on 2012 data, the CBO says the average French effective corporate tax rate was 20%.
The C&AG report refers to the 2017 ‘Paying Taxes’ annual report produced by PwC and the World Bank. Its model company is a small firm with 60 employees which sells all its output of flower pots in its domestic market. The C&AG report says:
“France had the second highest statutory rate at 38% but the lowest effective rate at just 0.4%.”
However, France has a headline rate of 15% for small firms and the PwC/World Bank report for 2014 showed that the model company's effective rate for France, based on taxes paid, was 7.4%. The plunge to 0.4% in 2016 reflects a 6% wages tax credit with a limit of up to 2.5 times the national minimum wage. This tax credit took effect in 2015.
The French 15% rate applies to small to medium companies (SMEs) with a turnover of less than €7.63m and applies to the first €38,120 of profit ─ from 2019 the rate will apply to all SMEs.
The OECD survey of the French economy in 2013 did highlight how large listed companies in the main index of the Paris Stock Exchange, took advantage of particular tax breaks:
France’s high statutory tax rate is coupled with low revenues, measured either as a share of GDP or total tax revenues because of the large number of loopholes and tax breaks. As the Conseil des Prélèvements Obligatoires (French Tax and Social Charges Board, 2009) points out, the result is an effective tax rate paid on realised profits of only 8% for companies included in the CAC40 (the main index of the Paris stock exchange) and 22% for SMEs (firms with up to 249 employees). More generally, the report finds that the effective tax rate diminishes as company size increases. The three major tax expenditures include: i) the tax consolidation regime, whereby the profits and losses of individual companies belonging to the same group may be consolidated (CPO, 2010), ii) the deductibility of interest payments on debt financing, and iii) the tax credit on investment in research and development. The way global corporations consolidate their profits depends on tax rates in other countries, so having a high nominal tax rate naturally encourages businesses to pay taxes elsewhere. If interest income is taxed at the household level, interest deductibility can be justified to avoid double taxation. The government’s decision to cap the deductibility of interest payments on borrowing goes in the direction of double taxation but at the same time will reduce the differential cost of debt and equity financing.
As for the Irish effective rate of 12.4% compared with the headline 12.5% rate for a company such as Google, the tax it declares in Ireland is after massive profit shifting.
In 2015 €12bn was transferred from Google Ireland Limited via a Dutch company to an Irish shell company in Bermuda and Google had an effective tax rate of 6.4% outside the US in 2015.
The statutory tax rate is the rate levied on the next dollar of taxable profit. While this measure leaves a lot of information out, such as deductions and credits that reduce liability, it can have an impact on some business’s decisions by itself. One important decision it has an impact on is the location of profits. If the next dollar of profits is taxed at the statutory rate, companies have an incentive to locate their profits in countries with lower statutory tax rates. All else equal, high statutory tax rates tend to drive profit shifting.
The average effective tax rate is basically the amount of tax a corporation in a country pays divided by its income. As an all-in measure of tax burden, it considers the statutory tax rate, deductions, and any credits that reduce a corporation’s tax liability. Companies may look at the average effective tax rate when deciding which country to locate a new investment. All else equal, a company would rather put an investment in a country with a lower average effective tax rate because that investment will provide higher returns net of tax over its life.
The marginal effective tax rate is the tax corporations pay on a marginal investment, or an investment that makes just enough (in present value terms) to satisfy an investor, net of tax. This tax rate is mainly a function of the statutory tax rate and deductions corporations can tax on new investments, such as depreciation allowances. The marginal tax rate determines how much a company is willing to invest in a given country. The lower the marginal tax rate on new investment, the lower the pre-tax returns on those investments need to be to satisfy investors on an after-tax basis. As such, companies are more likely to pursue more investment projects when the marginal rate is lower.
Irish Health Service: On money spent it should be among world's best
If it was only spending money that mattered in delivering a key national social service, Ireland would have one of the best health services among rich countries - there is something rotten in the hybrid public-private system that 6 health ministers starting with Micheál Martin in early 2000, have been unable to fix. Stripping out inflation, total health spending per head doubled in Ireland and UK in 2000-2016 and rose 37% in Germany; 38% in Denmark and 25% in France.
Ireland in 2016 was among the richest countries on per capita spending (adjusted for price differences between countries PPS) according to the OECD: Ireland- US$5,528; Germany $5,551; Denmark $5,199; France $4,600; Sweden $5,487; Spain $3,248; UK $4192. Europe's richest countries Norway and Switzerland spent $6,647 and $7,919.
The US per capita spending in 2016 was $9,892 compared with Canada's $4,644.
The above data relate to current expenditure. On investment in capital equipment/infrastructure, for some of the boom years at 0.6% of GDP (this denominator is inflated by a third due to tax avoidance etc) we tracked Norway; it was at 0.51% in 2013; 0.46% in 2014 and 0.39% in 2015 (this was the year of Leprechaun Economics when Ireland's GDP jumped 26% - so the realistic ratio was higher), while Denmark and France were at above 0.60% in each year.
FT columnist Lucy Kellaway moves on after years of deriding corporate bullshit
July 2017: Financial Times (FT) columnist Lucy Kellaway has been writing on the strange and
indecipherable language of chief executives and their companies for over 20
years. She looks back at a career of deriding the hot air and asks: has it made
FT columnist Lucy Kellaway says chief executives need to have a hard think
before deciding to join Twitter. She looks at the successes and failures of CEO
tweeters including Tim Cook, Marissa Mayer, Elon Musk and Warren Buffett.
After 31 years at the Financial Times, management columnist and associate
editor Lucy Kellaway is leaving to start a new career as a teacher. In an FT
Facebook Live discussion with Gideon Rachman, she explains her move.
I’m becoming a teacher at 58 — this is why you should too | Lucy Kellaway |
TEDx London Business School — After 31 years as a prominent and well-respected
Financial Times columnist, Lucy Kellaway has made the decision to leave – to be
a maths teacher. There are many programmes encouraging fresh graduates to enter
the teaching profession, but what about seasoned professionals? In her talk,
Lucy will reframe the way we think about being an educator and why it’s more
important than ever to be one now.
Lucy Kellaway has spent the last three decades at the Financial Times writing
columns that poke fun at corporate life, business jargon and management fads.
She is the newspaper’s office agony aunt and inventor of the insufferable
fictional character, Martin Lukes. In September 2017 she is leaving all this to
be a maths teacher in an inner city school in London. In November 2016 she
co-founded Now Teach, a charity designed to persuade high-flying fifty
somethings from the corporate world to train alongside her. For nine years she
was a non-executive director of Admiral plc.
FT columnist Lucy Kellaway explains how not to compose your summary on the
networking site LinkedIn. She looks at the profiles of Hillary Clinton, former
GE head Jack Welch and LinkedIn co-founder Reid Hoffman:
The last time Lucy Kellaway visited Unilever’s London HQ it was
a rabbit warren of corridors, closed offices and wood panelling. Now it’s a vast
glass and steel temple to the modern office — but is it any better?
Lucy Kellaway, FT management columnist, and Tyler Brûlé,
editor-in-chief of Monocle and the FT’s Fast Lane columnist, go head to head
over how we work today, and what the rules of office life should be.
Swiss basket of grocery items +91% more expensive than France in 2017
A Swiss basket of grocery items is +91% more expensive than France in 2017.
a wealthy country and the per head standard of living (based on consumption
adjusted for price differences) is among Europe's highest. However, the rise in
the value of the Swiss franc in recent years compared with the euro has made the
country a very expensive place to visit and it is also bad news for low-income
A snapshot comparison by Swissinfo of a 14-item list of basic groceries has
revealed a +€27.74 (CHF30.38) difference between Switzerland (COOP supermarket
in Lausanne) and France (Carrefour supermarket in Ferney Voltaire, near Geneva).
Uber gets a backseat driver as Kalanick exits top job
As the ride-hailing company Uber lurched from one clumsy mess to the next, it had appeared that CEO Travis Kalanick would somehow ride out the storm. His recent resignation is an admission that the company needs to explore new avenues.
I wrote recently about tech CEOs who had protected themselves from the usual pressure from shareholders, and were able to freely dictate strategy and culture. I’m happy to say that Kalanick’s departure from the top job (he will stay on the board) signals that there is indeed a line to cross where even disenfranchised investors can assert their power. It is not hard to see why: Uber is facing up to some tough decisions.
Aside from the rows around a damaging corporate culture, news that rival Lyft has increased its share of the US ride hailing market from 17% to 23% is rapidly destroying investor assumptions about this industry. Uber investors have stumped up US$12 billion in the belief that this is a winner-takes-all market. That now looks not to be the case.
This is great news for the customer as low fares are likely to persist. Uber investors had been funding incentives to both customers and drivers in the hope that both would stay put once the incentives stopped. Evidence is beginning to suggest otherwise. Uber’s 2016 losses, largely driven by the funding of incentives globally and from the development of driverless car technology, were US$2.8 billion.
So where did that winner-takes-all belief come from? Well, investors had looked at Amazon, Facebook and Google. The first mover in those cases developed a large customer base attracted by an increasing number of suppliers. In turn, suppliers found access to large numbers of customers and had no motivation to go elsewhere. The software simply does the matching.
An Uber customer wants a quick pick-up and cheap fares while the drivers want to be busy generating higher wages. So, in theory, an app which offered both at a high level, and was first to market, should attract most of the drivers and customers.
However, the app is readily copied. Many taxi firms now have their own app with similar attributes. Customers may now have several ride hailing apps on their phones which they can check for the cheapest and most rapid arrival.
Additionally, drivers are self-employed and can switch their allegiances rapidly. This is not a recipe for world domination.
Existing firms leap at the opportunity to expand. Lyft has proved that to be so by gaining US market share just as Uber’s reputation was soured by allegations of a sexist and macho culture. A major lawsuit from Google has only added to the sense of a company struggling to maintain its grip.
Uber can learn from Lyft, which has succeeded with a clear market focus, unhindered by unrelated diversification. Lyft has focused on ride hailing in the US alone. Uber has expanded globally and invested heavily in driverless car technology. Uber spent $2 billion in a Chinese market it has now exited under pressure from the local competitor Didi Chuxing.
In the Indian market, which is led by Ola, Uber was slow to adapt to very different market conditions and lost time and position. Even in the UK, Uber has faced competitive and political pressure from established taxi operators. Focus means being able to channel resources, knowhow and competitive strategy into one area. Uber has left itself open to attack on too many fronts.
That brings us to Kalanick’s odd move into driverless car technology, taking on the might (and vast resources) of Google. Many of the world’s major car companies, with their own attendant resources and technology partners, are also investing heavily. Was Uber really going to win a fight against Ford, Mercedes, GM, and Tesla?
It is likely they are all further ahead than Uber. Indeed it is difficult to see what technology Uber has to offer in this particular market. Surely this is a prime opportunity for a deal where Uber supplies the demand while the more advanced partner supplies the technology and cars.
Kalanick’s ambition has been fundamental to the rise of Uber. With his departure from the CEO role, perhaps that ambition will give way to strategic sense. Kalanick was able to cling on for so long partly thanks to investors’ desire to unearth the next tech giant, which made them indulgent of the founder’s control. The hope must be that the Uber experience encourages investors to tighten the reins on tech executives. The job for the next CEO will be to convince investors and customers that it is worth sticking around to see how this all ends.
The two Swedes recognised the simple but too-often-overlooked soft underbelly of global trade and growth: prosperity doesn’t distribute evenly. And workers in bustling export industries benefit at the expense of those who face foreign competition.
Building on the H-O model, academic economist Branko Milanovic has described in an elegant chart how income around the world changed from 1988 to 2008. Only one income bracket failed to get significantly richer: those around the 80% percentile. That’s the middle class in the developed world and the upper class in poor countries.
Ironically, Milanovic’s graphic both resembles and reflects the proverbial elephant in the room that carried Trump to victory in regions such as the US Rust Belt, which are populated by those he characterised as forgotten Americans.
It supports Heckscher and Ohlin’s fundamental premise about the unequal consequences of economic growth – rare is the tide that lifts all boats. Milanovic demonstrates the disparities of our era of globalisation: the rich get richer, the poor get much less poor, and a big chunk of the middle class gets left behind.
The argument is relatively easy to understand. Assume that in a country there are only two industries, divided into high-skilled and low-skilled workers who produce high-tech content (product H) and low-tech content (product L).
Country A (say the United States) has proportionally more high-skilled individuals than country B (let’s call it China). Let’s further assume that both the Chinese and Americans have similar tastes for products. That’s a lot of assumptions, but the intuition should be straightforward: countries with a higher proportion of more educated workers have an advantage in producing more technologically advanced goods. It’s as simple as that.
In the absence of trade, the United States would produce more goods and services that use high-skilled workers than China. A simple demand and supply graph illustrates this:
Without trade, the United States produces more high-tech goods and consumers pay a lower relative price for them than in China. But here is the important point: in the US, the wages of high-skilled workers are lower than in China. Not lower in absolute but in relative terms.
Great programmers in the US are handsomely rewarded because the country can export the goods and services they produce. If Apple, Uber or Facebook could sell and operate only in the US, the demand for high-skill workers would be much lower than it is today, and the country’s lower-skilled labor force would not face such strong competition from abroad.
With trade, low-tech goods become relatively cheaper in the US. But, critically, people who work in low-tech industries there face the prospect of lower wages, even if the overall price of goods and services in the economy falls, because there is less demand for their jobs. Trade increases job growth in the US economy, but in some industries there are job losses.
The argument is relatively easy to understand. Countries with a higher proportion of more educated workers have an advantage in producing more technologically advanced goods.
But all the empirical evidence on the importance of trade to income distribution comes to fruition in a 2014 paper that finds clear evidence that openness to trade increases wage inequality at lower levels of income (within the OECD). It also found there was no significant effect at higher levels of income.
The H-O model sharpens focus on the realities of our modern world. Inflation has been strikingly absent in the rich world during the 21st century due largely to the growth and efficiency of international trade. This has made products cheaper for the average American but, at the same time, globalisation has significantly spurred income inequality.
The model provides a direct link between the Chinese internal migrant working long hours in a Shenzhen factory and the Silicon Valley employee enjoying an elitist’s workday, replete with healthy snacks.
And we have known the optimal policy regarding trade agreements for a long time but failed to implement it effectively. Free trade has a necessarily distributive effect. And the correct path is to have trade agreements with specific programs to diminish its negative impact on certain levels of income.
In NAFTA, for instance, the Transitional Adjustment Assistance (NAFTA-TAA) program had as its primary goal to assist workers who lost their jobs or whose hours of work and wages were reduced as a result of trade with – or a shift in production to – Canada or Mexico.
Ignoring Heckscher and Ohlin’s prescient wisdom has cost many people their livelihoods. The best path for society is to increase trade agreements but only if accompanied by fail-safes for the segments of society most likely to be adversely affected.
Policymakers and researchers forgot this for too long and we are now facing the backlash.
Financial Times: London's euro clearing dominance has been in the spotlight since the Brexit vote, as Europe would like this returned. The FT's Philip Stafford and Daniel Hodson, chairman of FSNForum and board member of Vote Leave, discuss the merits of such a move.
Thug Nation: Venezuela’s broken socialist revolution
FT Video: Once touted as a beacon of revolutionary socialism, today there are fears
that Venezuela is on the cusp of becoming a failed state. Andres Schipani and
Ben Marino report on the spiralling violence and economic, social and political
crisis facing the oil-rich nation.
Last year 29,000 people were murdered in Venezuela
YOU find them driving taxis in Buenos Aires, working as waiters in Panama or selling arepas (corn bread) in Madrid. The number of Venezuelans fleeing hunger, repression and crime in their ruptured country grows by the day. For years, Latin American governments kept quiet as first Hugo Chávez and then his successor, Nicolás Maduro, hollowed out Venezuela’s democracy. Now their economic bungling and Mr Maduro’s increasingly harsh rule are causing a humanitarian crisis that the region can no longer ignore. At last, it is not...He retains the support of 25% of the population and of the security forces (some from ideological conviction, others because of perks or corruption). His recent actions suggest that he plans to turn Venezuela into an autarkic dictatorship in the mould of Fidel Castro’s Cuba.
Seth Meyers and John Oliver show how Trumpcare will kill many Americans
On Monday the US Congressional Budget Office report on Trumpcare — the
replacement for the health insurance system that the Obama Administration
proposed for Americans without employer provided health insurance — estimated 14
million people losing insurance in the first year 2018 and 24 million by 2026,
with premiums soaring for older, lower-income Americans. The CBO says Trumpcare
would cut the annual budget deficit about $30 billion a year in a $19 trillion
economy. It adds: “In 2026, an estimated 52 million people would be uninsured, compared with 28 million who would lack insurance that year under current law.” That’s a fifth of the non-elderly population left to fend for themselves, nearly double the current proportion.
Last January, days before Donald Trump became president, he said in an interview that he was nearing completion of a plan to replace President Obama’s
signature health-care law with the goal of “insurance for everybody."
The Los Angeles Times
reports that among those hit the hardest under the current House bill are
60-year-olds with annual incomes of $30,000, particularly in rural areas where
healthcare costs are higher and Obamacare subsidies are greater. In nearly 1,500
counties nationwide, such a person stands to lose more than $6,000 a year in
federal insurance subsidies. Ninety percent of those counties backed Trump, the
And 68 of the 70 counties where these consumers would
suffer the largest losses supported Trump in November.
The billionaire champion of poor whites is going to be responsible for the
premature deaths of older supporters — in effect killing them.
Seth Meyers takes a closer look at Trump's
outlandish claims on wiretapping and the Republican plan to repeal and replace
The Republican health care bill could
leave many Americans without affordable coverage. Last Week Tonight's catheter
cowboy returns to morning cable news to explain that to Donald Trump.
The New York Times
says that two of the biggest tax cuts in Republican proposals to repeal the
Affordable Care Act (Obamacare) would deliver roughly $144 billion over the
coming decade to those with incomes of $1 million or more, according to a
A short film The Price of Certainty, by a Jewish survivor of wartime Poland:
If you have high “need for
closure,” you tend to make decisions quickly and see the world in black and
white. If you have a low need for closure, you tolerate ambiguity, but often
have difficulty making decisions. All of us fall naturally somewhere on this
Foreign countries not US have first call on Apple's $200bn+ cash trove in Irish shell firms
It's not a recent development for tax offices to look behind sham/artificial
structures in dissecting schemes to reduce tax. In recent years the abuse in the
CT area has also focused on sham arrangements.
The House of Commons Public Accounts Committee in 2013 rejected Google's
argument that sales of corporate advertising were completed and thus invoiced in
Dublin as Google UK staff only partially handled sales issues with
clients — "an argument which we find deeply unconvincing on the basis of
evidence"; "Google has also conceded that its engineers in the UK are
contributing to product development and creating economic value in the UK";
"HMRC needs to be much more effective in challenging the artificial corporate
structures created by multinationals with no other purpose than to avoid tax."
Edward Kleinbard, professor of law and business at the University of
Southern California, is a former chief of staff of the US Congress's Joint
Committee on Taxation, and he testified at the US Senate hearings on Apple in
May 2013. Prof Kleinbard wrote this week on The European Commission ruling that
Ireland provided Apple with illegal state aid:
Tax here was just the instrument for delivering state aid. The US
Treasury is expert in detecting tax shams used to disadvantage US tax
collections, and should have recognized that the EC similarly is making a
sham arrangement argument.
Kleinbard says Jack Lew, US Treasury secretary, and Apple
are wrong when they argue that only the
Internal Revenue Service has a legitimate claim to Apple’s $230bn in largely
untaxed offshore cash, technically in Irish offshore shell companies but
actually in the United States. "This is a misstatement of US law."
Apple says 65% of its earnings are foreign-related but it also contradicts
itself by saying most profits are generated in the US. However, the the profits
it books overseas puts overseas tax offices other
than the IRS ahead in the taxing queue. Apple settled a tax fraud case last
year with Italy and there are more to come.
For nearly 100 years the nation has followed the principle that the
jurisdiction in which income arises (the “source jurisdiction”) has priority in
taxing cross-border income. To prevent double taxation, a US company can claim a
credit against its US tax bill for levies already paid to source countries.
So US tax on a dividend repatriation is a residual liability of the company,
payable only to the extent that source countries have not first taxed the
says the United States aids and abets US multinationals in their stateless
income tax gaming, whose object is to skim profits from countries where income
actually is earned, and then to deposit those profits in a zero or near zero tax
receptacle. That is the source of Apple’s offshore cash hoard totaling more than
the facts to their essence, in Europe, Apple has deployed the almost farcical
charade that its income from retail sales in Germany, for example, really is
earned by an Irish subsidiary that hovers just beyond the German border, doing
all the value-added work to offer Apple products to German retail customers, but
never quite putting a foot down in Germany.
For the United
States, the game is different, but just as artificial. Apple’s plan, authorized
in broad outline by IRS regulations, was to create an Irish subsidiary, stuff it
with seed money, and to pretend that the subsidiary had its own independent
business agenda. Apple Cupertino and Apple Ireland then entered into an “arm’s
length cost sharing agreement” of the sort that two independent drug companies
might employ to jointly develop a new drug.
The Irish shell companies were available to Apple for massive tax avoidance
with reported sales in several countries artificially suppressed. The EC views
the structure as a sham and it's unlikely that it was commonly available to
makes this a state aid case rather than a tax one is that there is no plausible
explanation for Ireland ceding its tax authority other than its understanding
that jobs would follow. The parties reverse engineered a methodology to yield an
agreed minimal tax take.
The question for markets after the referendum was whether the UK’s Brexit decision would result in a short, sharp shock or a more fundamental re-set. One month on, uncertainty persists. The FT’s senior investment columnist John Authers assesses sentiment.
Talking Trade: The FT’s Sebastian Payne rounds up the week’s Brexit news, including International Trade Secretary Liam Fox’s first foray into diplomacy and Prime Minister Theresa May’s visit to Rome.
Lionel Barber, FT editor, and Janan Ganesh, political commentator, discuss how the UK’s three Brexit ministers — Boris Johnson, Liam Fox and David Davis — plan to negotiate exit from the EU, and how they will work
On April 14, 2016, the John L. Thornton China Center and the Hutchins
Center on Fiscal and Monetary Policy at Brookings hosted a discussion examining
challenges and opportunities facing the Chinese economy, as well as the
financial and economic links between China and the world. Ben Bernanke, former
Federal Reserve chairman, joins later in the discussion.
In 2005, the Collins English Dictionary defined property porn as "a genre of
escapist TV programmes, magazine features, etc showing desirable properties for
sale, especially those in idyllic locations, or in need of renovation, or both."
Ever seen the nauseating 'Lifestyles of the Rich and Famous' American
television series that ended each episode with the grovelling host using the
catch phrase "champagne wishes and caviar dreams"?
Ten years later after bubble and bust, The Irish Times newspaper is back in
full flight with fawning editorial on expensive properties.
the main feature is titled 'Riverdance duo’s
Howth home for €9.5m' with a strapline 'Moya Doherty and John
McColgan, are downsizing. Their 9,000sq ft home is on the market (picture
Madeleine Lyons, property editor and special reports
editor of The Irish
What’s prophetic is that the site they chose was one of the finest in the
capital, and has only been enhanced since. This is reflected in the €9.5 million
minimum asking price through Ganly Walters. Danes Hollow will be one of the best
properties to come on the market in Dublin this year.
With further elegant homes in London, Manhattan and Martha’s Vineyard, Danes
Hollow might be just another part of the couple’s portfolio, but it has that
As the agent puts it: “Whoever buys this property doesn’t even know that they
want it. It’s when they see it for the first time that they will know.”
What is part of the property porn genre is the
bullshit or exaggerated lexicon of the property industry: so the
couple of course have "elegant homes in London, Manhattan and Martha’s Vineyard"
but because a place is expensive doesn't mean its elegant!
Property porn typically gives a reason why the property is put on the market
and in the past The Irish Times has used "downsizing' as a reason when in fact
the vendors were trying to settle bank claims — I'm not suggesting that this is
relevant is this case but the fact is that the content is advertorial not
There are other properties of the rich/ well off that
are featured today. Note again the bullshit lexicon
used by the freelance writers.
Fishing rights and island included in Co Cork for €3.5m — A sensitive
renovation and makeover, costing €2 million, makes this Georgian gem, on the
banks of the Blackwater in Fermoy, one of the best of its type in Ireland
Modern drama with rural charm for €2.8m — This Co Meath house near Collon has
been tastefully rebuilt and offers plenty of period features, while the
extensive grounds are perfect if you – or your horse – like a bit of space
Edwardian elegance in Killiney for €2.8m — Extended in 1990, Steeplewood is a
detached period house on beautiful gardens
Smart mix of old and new in Dalkey for €1.95m — Spacious home on Sorrento
Road has new enclosed patio area at front of house
Donnybrook five-bed with oodles of potential for €1.4m — Bring your architect
with you when you go along to view this one
Show-stopping gardens and seclusion on Sorrento Road for €1.35m — Secluded
three-bedroom property with gardens as outstanding feature
A redesigned upside-down mews in Ballsbridge for €950,000 — Delightful town
garden with giant ferns and evergreens, raised patio and spot lighting
Donald Trump, US presidential candidate, has put a range of price tags on the wall he wants to build on
the 2,000-mile border with Mexico. It would be 1,000 miles long, made of precast
concrete slabs, rising 35 to 40 feet in the air.
Oliver, the British presenter of Last Week Tonight, a US comic news
show, says Trump’s estimates of the cost range from $4bn, $6bn, $7bn, $10bn and $12bn.
Estimating the cost of the wall based in part on a piece by Glenn
Kessler of The Washington Post, Oliver concluded that the wall would actually cost “conservatively” $25bn.