The Angry Bear

According to Modern Healthcare: “In a brash move likely to roil insurance markets, President Donald Trump will ‘immediately’ halt payments to insurers under the Affordable Care Act. Before sunrise Friday morning, Trump went on Twitter to urge Democrats to make a deal: ‘The Democrats ObamaCare is imploding, massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!’ The Department of Health and Human Services had...

By Steve Roth  (originally published at Evonomics) How Amazon’s Accounting Makes Rich People’s Income Invisible Image you’re Jeff Bezos, circa 1998. You’re building a company (Amazon) that stands to make you and your compatriots vastly rich. But looking forward, you see a problem: if your company makes profits, it will have to pay taxes on them. (At least nominally, in theory, 35%!) Then you and your investors will have to pay taxes on them again when...

IMF Fiscal Monitor: Progressive Taxation Need Not Deter Growth The latest from the IMF is a must read for progressives even if it runs contrary to the nonsense coming out of the White House: At the global level, inequality has declined substantially over the past three decades, but within national boundaries, the picture is mixed: some countries have experienced a reduction in inequality while others, particularly advanced economies, have seen a...

Hassett’s Evidence on Transfer Pricing and the U.S. Trade Deficit In my last post, I questioned Kevin Hassett’s claim that transfer pricing manipulation was responsible for half of our trade deficit and asked what was the paper he referenced. We have the text of his speech: There is another important factor to consider when thinking about how these changes will affect the economy. A recent NBER working paper (Guvenen, Mataloni, Raisser and Ruhl 2017)...

Puerto Rico, Transfer Pricing, and Kevin Hassett Scott Greenberg provided a nice summary of what section 936 was and how its expiration had contributed to Puerto Rico’s economic and fiscal difficulties: beginning in 1976, section 936 of the tax code granted U.S. corporations a tax exemption from income originating from U.S. territories. In addition to section 936, the Puerto Rican corporate tax code gave significant incentives for U.S. corporations...

One more scene from the September jobs report: late cycle deceleration continues The rate of year over year job growth is probably the single best mid-expansion indicator, in part because there is very little noise in the Establishment survey jobs data YoY. But, as the below graph shows, going back all the way to 1948, while it is noisier the Household survey YoY jobs data also traces out the same pattern with very few exceptions (notable the early 1950s...

Does Kevin Hassett Understand Transfer Pricing? Howard Gleckman does: It is true that bringing US corporate rates in line with our trading partners may reduce incentives for improper transfer pricing. But there is a flaw in Hassett’s argument: While these practices are aimed at reducing tax lability, they do not represent real economic activity. And limiting income shifting won’t significantly increase domestic employment. He was noting this...

On Richard Thaler Receiving The Nobel Prize This is a Sveriges Bank Prize in Economic Science in Memory of Alfred Nobel that I should approve of unequivocally, and I do approve of it. Dick Thaler has long been known to be on the list of likely recipients since at least when Daniel Kahneman shared it with Vernon Smith back in 2002, although I sort of thought the award just a few years ago for Robert Shiller would put Thaler’s off a bit. Nevertheless, I...

The Times Handles the Trump Tax Cut Framework with Kid Gloves There’s been a good bit written about the Trump tax cut framework released just over a week ago.  Most of it points out, as I have here and here, the absurdity of the claims by Trump and GOP spokespeople that this isn’t a tax cut aimed at benefiting the ultra wealthy.  After all, even with few details and no attempt to deal with the really tough issues that would face real tax reform...