The pols are out trying to punish firms that buy back their own shares. The left wants to ban buybacks unless a company agrees to a litany of their demands. The right wants to put buybacks and dividends on equal footing by taxing buybacks. Neither approach is a good idea. If the government bans buybacks, acquisitions and conglomeration are likely to increase—both have a higher probability of destroying value. The politicians are attacking this from the wrong direction. As we have written in the past, buybacks started to soar in the 1990s after executive pay for public firms became … [Read more...]
Archives for March 2019
Cryptocosm and Life After Google: Is Tether No Longer Credible?
What happens when the core promises of a crypto-currency no longer hold true? Frances Coppola, a Senior Contributor at Forbes explains that Tether, a so-called "stablecoin," that is supposedly pegged to the U.S. dollar may not be as linked to the fiat currency as has been advertised. She writes: USDT is the foremost stablecoin in the crypto world. Pegged one for one to the U.S. dollar, it is widely used as a vehicle for getting dollars in and out of crypto exchanges. Crypto enthusiasts will tell you that holding USDT (“Tethers”) is the same as holding dollars. But now, Tether, the issuer of … [Read more...]
Is Your State a Property Tax Hell?
If you don't live in the Northeast, it's likely that it could be worse. According to a Tax Foundation analysis, the 6 states with the highest property tax collections per capita are in the northeast, with those ranked eighth and tenth joining them there. The region is property tax hell. Outside New Jersey (1st), New York (4th), and the New England states (NH 2nd, CT 3rd, VT 5th, RI 6th, MA 8th and ME 10th), only Wyoming (7th) and Illinois (9th) crack the top ten. Though the non-state of Washington D.C. has the highest rates of all at $3,535 collected per citizen. Property taxes are an … [Read more...]
Why Bill Gates Wants to Raise Your Taxes
Bloomberg reports that Bill Gates is out in favor of raising tax rates on capital gains to target America’s wealth. Raising the tax rate on capital gains in the name of generating more revenue or narrowing the wealth gap is a half-baked and incredibly lazy idea. It’s one thing for Senators Bernie Sanders or Liz Warren to propose soak-the-rich tax policies to rile up their base, but Mr. Gates should know better. A higher capital gains tax rate will do nothing to narrow the divide between rich and poor, nor will it generate higher tax revenue for the government. America’s richest … [Read more...]
Could Colleges be Forced to Share the Risk of their Students’ Success?
A new proposal by the White House could force colleges and universities to share in the risk of their students' defaults on federally funded student loans. Michelle Hackman reports on the plan in The Wall Street Journal, writing: The White House is weighing a measure that would require colleges and universities to take a financial stake in their students’ ability to repay government loans, an effort that could squeeze loan availability to students and reduce defaults. For several months, Trump administration officials have been discussing enacting such a mechanism or making a push for one … [Read more...]
Will the Fed ever Keep Bernanke’s Promise to Unwind?
Ten years after Ben Bernanke's famous 60 Minutes interview, the Fed is looking less likely than ever to unwind the unconventional monetary policies it used to fight the Financial Crisis. Danielle DiMartino-Booth writes for Bloomberg: If the primary goal was recovery without inflation, the Fed delivered. Since the onset of recovery in June 2009, the core personal consumption expenditures index, which measures the prices paid by consumers for goods and services net of food and energy prices that tend to be more volatile, has been above 2 percent in in just five months in 2018, four in 2012 and … [Read more...]
Connecticut Just Doesn’t Learn: Now Targets the Middle Class With New “Sin” Taxes
Now that Connecticut has raised taxes on the wealthy so high many of them are fleeing the state, Ned Lamont, the state's governor, and its legislature, are setting their sites on the middle class to fund state government. The state is overloaded with debt. After a borrowing binge, the state raised taxes, but it still can't pay its bills. So, rather than making the hard choices by cutting spending, the government is coming after middle class families with taxes on things like soda and electronic cigarettes. In the CT Mirror, Thomas Aiello, a policy and government affairs associate with … [Read more...]
Bianco: Devaluation to Fund Government Has Never Worked
Writing at Bloomberg, Jim Bianco explains to readers that devaluing a currency to fund government has never worked. The Modern Monetary Theory, a current hot topic among the Socialist-leaning politicians and activists in Washington D.C. today, is very much the devaluation of money to fund government. Bianco writes: MMT is basically a sibling of quantitative easing. While QE allowed the Fed to print money to buy securities such as U.S. Treasuries, mortgage bonds and bad loans, MMT proposes printing money to fund the government. The Fed has hailed QE as a success, bringing the economy back from … [Read more...]
Democrats Fight for the Wealthy with New Tax Bill
Senator Bob Menendez (D-NJ) is pushing a bill with his House colleague Rep. Bill Pascrell (also from NJ), to eliminate the cap on deductions for state and local taxes. The cap has hit wealthy Americans in high tax states like New Jersey very hard. In 2010 Menendez called the GOP Senate negotiators terrorists for attempting to extend the entire Bush tax cut plan, now he's demanding tax breaks for many of the same people the Republicans were fighting for then. Naomi Jagoda of The Hill reports: Sen. Bob Menendez and Rep. Bill Pascrell, both New Jersey Democrats, introduced legislation last … [Read more...]
The Meat Industry is Growing Chickens so Fast They’re Not Edible
For decades chicken growers have been working to speed up the rate at which a chicken grows from chick to roaster size. To reach the target weight of 6.3 pounds today takes 47 days, as opposed to double that 50 years ago. But the acceleration in chicken growth hasn't come without its own problems. The Wall Street Journal's Jacob Bunge reports on what has become known as "spaghetti meat." He writes: Chicken companies spent decades breeding birds to grow rapidly and develop large breast muscles. Now the industry is spending hundreds of millions of dollars to deal with the consequences ranging … [Read more...]