The Los Angeles Times (July 5)
2010 is the year to throw grandma off the train. That is, if she lives in the U.S. In 2010 only, there is no estate tax on inheritance. The estate tax expired in 2009. From 2011, estates exceeding $1 million will again be taxed. Dan Duncan became the first billionaire to die during this one-year window. His heirs will not pay taxes on their windfall. The Los Angeles Times opinion piece argues that taxing inheritance is very important for the health of a society, especially in the U.S. where “the wealthiest 1% of Americans own more than 33% of the country’s wealth.”
The Washington Post (July 5)
The 500 largest nonfinancial companies in America have amassed cash totaling $1.8 trillion on their balance sheets. This is the highest amount (normalized or otherwise) in nearly half a century. Fareed Zakaria, Editor of Newsweek, says the key to getting the U.S. economy rolling again is getting companies to start spending this money on investments, such as plants, in the real economy.
Tags: Balance sheet, Cash, Economy, U.S.
The Wall Street Journal (July 4)
The Wall Street Journal supports Naoto Kan’s pledge to lower the corporate tax rate from 40% to about 25%, but questions the wisdom of increasing the consumption tax to 10% while Japan’s economy continues on a deflationary trajectory.
The Independent (July 3)
Jeff Immelt, Chairman and CEO of GE, shared some interesting thoughts about China. “I am not sure that in the end they want any of us to win or any of us to be successful.” The words were interesting because Immelt, once one of China’s biggest cheerleaders, now appears worried over China’s changing regulatory environment. Immelt made the remarks in Italy. The Independent’s take was distinctly British: Immelt “views General Electric as a national champion for the US, rather than as the citizen of the world.”
Tags: China, GE, Jeff Immelt
Bloomberg (July 1)
Japan is the land of “bargain-basement CEOs.” Less than 300 people at Japan’s 3,813 listed companies reported earning more than the 100 million yen disclosure threshold. An average CEO in Japan earns $590,000 compared to $3.5 million in the U.S. This pay gap can be a “stumbling block” for Japanese companies going overseas. They may have to pay overseas workers more than their CEO. For example, the U.S. head of sales at Takeda Pharmaceutical earns twice as much as Takeda’s CEO.
The Economist (July 1)
Financial reform in the U.S. moved a step closer. The House of Representatives passed the 2,319-page Dodd-Frank Wall Street Reform and Consumer Protection Act. A vote in the Senate is expected later in July. Many are calling this legislation the biggest overhaul of the financial system since the 1930s. The Economist believes the act “does make progress,” though it “is an incomplete remedy.” That so much reform is nearly accomplished, however, shows the great motivation provided by the financial crisis.
Tags: Congress, Dodd-Frank Act, Financial Reform
New York Times (June 29)
The world is “now conducting a dangerous experiment.” An article by David Leonhardt compares current moves to cut government spending and raise taxes with what happened during the Great Depression, when the fragile recovery was upset. Though there are striking similarities, there is room to hope that “today’s situation is different enough to assure a different outcome.”
Tags: Government spending, Great Depression, Recovery, Tax
