Category Archives: Corporate tax

5/4/20: Effective Corporate Tax Rates in the U.S.: 1980-2019


Evolution of effective corporate tax rates in the U.S. from 1980 through 2019:

Source: Yardeni Research, with my annotations

Effective tax cuts rates rankings by Presidential Administration:
Bush Jr (largest cuts)
Bush Sr (second largest cuts)
Trump (third largest cuts)
Clinton (fourth largest cuts)
Obama (net change approximately zero)
Reagan (net change positive)

Taxes and tax burdens are complicated, folks...

9/1/19: Corporate tax inversions and shareholder wealth


Our new paper "U.S. Tax Inversions and Shareholder Wealth" has been accepted for publication in the International Review of Financial Analysis:


The paper abstract:
"We examine a sample of corporate inversions from 1993-2015 by firms active in the U.S. markets and find that shareholders experience positive abnormal returns in the short-run. In the long-run, inversions have a deleterious effect on shareholder wealth. The form of the inversion and country-pair differences in geographic distance, economic development and corporate governance standards are determinants of shareholder wealth. Furthermore, we find evidence of a negative and non-linear relation between CEO total return and long-run shareholder returns."

9/1/19: Corporate tax inversions and shareholder wealth


Our new paper "U.S. Tax Inversions and Shareholder Wealth" has been accepted for publication in the International Review of Financial Analysis:


The paper abstract:
"We examine a sample of corporate inversions from 1993-2015 by firms active in the U.S. markets and find that shareholders experience positive abnormal returns in the short-run. In the long-run, inversions have a deleterious effect on shareholder wealth. The form of the inversion and country-pair differences in geographic distance, economic development and corporate governance standards are determinants of shareholder wealth. Furthermore, we find evidence of a negative and non-linear relation between CEO total return and long-run shareholder returns."

18/11/17: Say thanks BEPS, as Sweden Cuts Corporate Tax Rates Again…


Sweden, the tough-fighting 'socialist' haven of capitalism is cutting its corporate tax rates. Again.

Yes, that is right. Sweden used to have a decisively 'socialist' rate of corporate income tax (irony implied) of 28% until 2008. In 2009 this rate dropped to a relatively convincing 'socialist' rate of 26.3%, before falling to a sort-of-'socialist' softy 22%. It now plans a cut to 20%.
 h/t for the chart to @mattyglesias 

The announcement is made here: http://www.ey.com/gl/en/services/tax/international-tax/alert--sweden-proposes-major-corporate-income-tax-changes h/t to @tylercowen for the link. 

Note, extensive compliance changes proposed for Swedish tax code to bring it in line with the OECD's BEPS scheme. The scheme was designed, as defined by its objectives, to make it harder for the corporations to avoid taxes in the future. Which means, of course, that to maintain effective tax rates closer to where they were before the BEPS, Sweden, as other states, will need to offset BEPS-induced accounting changes with lower headline rates. 

Tax optimization, folks, just went mainstream in Europe and the U.S. Which is a good thing for transparency (reducing the disparity between the effective rates and the headline rates). But a bad news for personal income taxes. To offset the declines in corporate tax revenues that BEPS changes will inevitably engender, Governments from Sweden to Italy, from Canada to the U.S. will have to either cut spending or increase personal income tax rates. No medals for guessing what they will opt for.

2/2/16: MNC Ireland: A new Documentary


A new and well-worth watching documentary on the power of multinational companies in Ireland and Ireland's status as a corporate tax haven is available here: https://vimeo.com/137175562.


Note: Strangely enough, the documentary cites me as a Chairman of the IRBA (which I was at the time). It is worth repeating again that I never speak on behalf of any organisation I am involved with and the IRBA never had a corporate opinion on any policy-related issues. I only express my own personal views.