Phantom FDI – Companies Aren’t Investing, They’re Hiding Money

Better still would be to tax revenue instead of profit which can always be fudged. Tax of just 1 or 2% should be sufficient with no tax for those under $500,000 revenue, for example.

Many say it’s regressive but I don’t buy it and I run a small biz. Widget Co. doesn’t give me a break on pricing because I didn’t show a profit last year. Why should government?

Government provides a service like everything other: roads, water, police, fire, health, airports, etc. They should get paid for services rendered just like every other vendor.

When any economist discovers transfer pricing and begins waxing eloquent about tax fairness, I instinctively feel for my wallet. No politician anywhere ever taxed a corporation for anything. It’s the customer who’s the mark and the customer is just too dumb/disinterested to stand and fight it by insisting the politician speak in total spend and total tax terms to the total citizenry.

However, Hussman is right on that the only way to have actually moved the R&D needle with foreign profit repatriations was to have restricted any tax credit to Future R&D spend rates above actuals. Otherwise, a huge chunk of repatriated profits would simply be fed into the stock buyback furnace, which is exactly what happened.

The really worrisome thing to me is corporate America’s blatant admission that they’d rather drive their own capital stock down with buybacks, enhancing their own comp plans, than blaze new trails with innovation…the only thing that actually drives human living standards.

Your response to excessive corporate profits that are being mal-invested – much of which comes from government allowed monopolies – is to increase those ill gotten profits and CUT taxes???

Ignoring facts to advance a fact free ideology, me thinks.

Next you’ll be telling us Venezuela economy if failing because socialism and airbrush U.S. sanctions out…or that universal single payer healthcare is bad…oh wait…you already did.

I enjoy reading Mish’s blog, but these three quasi guests aren’t qualified to clean my kiddie pool.

Setser teaches economics in California…. Berkley to be more specific. A place dedicated to stamping out capitalism and censoring anyone who disagrees with the cult’s teachings.

You lost me at Paul Krugman. Academic, political hack. Zero real world experience. Rubbish.

He got kicked out of Princeton for advertising fraud — he was one of the many people “advertised” to be teaching at Princeton, when in fact he didn’t teach a single course. Not one, for years and years. He wrote a complaint op-ed column for the NY Times while drawing a paycheck from Princeton.

Oh, and he wrote some left wing clap trap for the socialist government of sweden — that was the basis of the memorial prize from socialists for distorting economics.