American business issues – here and across the pond

In a New York Times article, Adam Davidson writes about “…an economic mystery” he is struggling to understand.
He cites Lee Pinkowitz, a professor at Georgetown, and other finance economists;
they have studied what they call the “cash hoarding puzzle, or paradox” of American business.

The highlights of the article
By some estimates $1.9 trillion in cash is held collectively by American businesses.
In Mergers and Acquisition, that kind of cash greatly helps to negotiate for the best price/terms.

There is also the intimidation factor – hardly any competitor can match their vast resources.
And have the upper hand when competing for new talent.

They can get the best the brightest.

Across the pond more tax problems for U.S. firms
“Tax efficiency” of multinational corporations may explain, at least partially, the puzzle described by Davidson.
More tax deals are being investigated by the European Union officials.

This time they want to investigate Googles tax deal with the British government.
Apple and Amazon are also in the limelight.

Things are serious enough that a top U.S. official was “dispatched” to meet with the EU antitrust team.
(Would this belong in the “lobbying effort” category?)

A new and improved tax system across EU
The EU Commission tries its best to close down the main tax loopholes used by multinational companies to lower their tax bills.
It’s an interesting “balancing act”. On one hand they want a uniform set of rules across EU;
yet member states would still be able to set their own tax rates.

When/if they succeed they may have a system somewhat similar to the federal/state tax system we have here in the U.S.

(Hope reading this can help you keep your tax problems in perspective : )


/Comments/in Time Money Success/by Mariana Fieraru
Mariana Fieraru
Mariana Fieraru, an Eastern European transplant, fell in love with her new home shortly after landing in New York. She "discovered" pizza! Years later she still loves pizza. And so do her two feathered-kids, Sunny and Flipper

Mariana worked on both, the east and the west coast.
Big or small, each project she worked on helped define the importance of gaining and sustaining a competitive edge in an increasingly complex business environment.

Business know-how, love of teaching and writing – all combined in 2006 to form OBI.
Its mission: to make learning fun! And easy.

Through its training, consulting, and publications OBI builds bridges of knowledge to take you from where you are to
where you want to go. Using a mix of serious, informal, analytical, and optimistic approach, OBI truly makes learning fun.

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