Earlier this week, at Brookings, House Majority Leader Steny Hoyer gave a notable speech on our looming national debt and the need to take bipartisan action on spending and taxes to address this growing problem. The talk was notable for its lack of partisan rancor — always welcome — and, in particular, for Leader Hoyer’s willingness to tackle some politically charged issues such as middle class entitlements. Along with the important work Republican Congressman Paul Ryan is doing on budget reform, Mr. Hoyer’s efforts are welcome and ought to be of particular interest to the business community — a community that has been notably silent in recent years on fiscal issues. His Brookings talk can be found here.
Posts Tagged ‘Taxes’
Hoyer on the U.S. Fiscal Crisis
Thursday, March 4th, 2010Judge Throws Out Bank of America Settlement
Tuesday, September 15th, 2009U.S. District Court Judge Jed Rakoff has rejected in the strongest possible terms a proposed settlement between the Securities and Exchange Commission (SEC) and the Bank of America over BofA’s alleged failure to disclose $3.6 billion of bonuses paid to Merrill Lynch employees shortly before BofA acquired Merrill. The settlement amounted to a $33 million fine to be paid by BofA.
Judge Rakoff’s decision to throw out the settlement agreement was based on an elementary sense of fairness. In his view, shareholders, having been obliged to pay the Merrill bonuses, were now being asked to pay the fine as well. Judge Rakoff quite properly interpreted the settlement as a evidence of a “cynical” relationship between the Commission and BofA management, whereby the Commission would claim a much-needed enforcement trophy, BofA would avoid further investigation, and the check would be picked up by the shareholders.
Judge Rakoff’s opinion points up the problem that few others in this age of good corporate governance tackle: namely that the cost of many feel-good reforms is inevitably borne by the shareholders for whom so many corporate governance experts and regulators cry crocodile tears.
Perhaps we can begin now to think about corporate governance reform as something other than a free good and evaluate proposals in that light. After that, maybe we can advance to another related matter: that people, not corporations, pay taxes and that efforts to stick it to corporations inevitably result in the costs being borne by individuals.
Words of Tax Wisdom
Wednesday, April 15th, 2009From the Wednesday, April 15 edition of The Hill: “You just can’t tax the rich enough to make this all up.”
So says Martin Sullivan, an economist from the Reagan years who said he supported President Obama last November.
He’s quite right, of course: the spending contemplated by the Administration, even with the expiration of many of the Bush tax cuts, will result in a huge growth in the deficit and, therefore, in interest costs.
There is a tax hike on the middle class coming: and, to quote a former head of the Congressional Budget Office I know well: “it is spelled V-A-T.”