The Wall Street Journal reports that large firms are more profitable and efficient than before the recession, but most of their new jobs and profits are overseas. The analysis of the financial reports of most firms in the S&P 500 found that the largest public companies have grown more efficient and profitable since 2007: average revenue per employee rose from $378,000 to $420,000. While capital spending and overseas hiring has grown, domestic hiring has not as U.S. firms continue to grow international operations in pursuit of higher sales, lower costs and lower tax burdens.
The statutory U.S. corporate tax rate is now the highest in the world at 35 percent, but is only levied on overseas profits when they are repatriated. U.S. policymakers continue to debate proposals to reform the corporate tax code. This CFR Backgrounder by Jonathan Masters details the debate and some proposals for U.S. Corporate Tax Reform.
Corporate regulation and taxation. Read more from top economists and business experts on solutions for addressing corporate tax reform.
Debate over Privatizing Highways
In an opinion piece on Politico, Rick Geddes—a Cornell associate professor and visiting scholar at the American Enterprise Institute—argues against restricting states from leasing transportation infrastructure. The Senate’s version of the highway bill contains an amendment by Sen. Jeff Bingaman (D-NM) which removes privatized highways from consideration when allocating federal highway funding. Bingaman’s amendment garnered strong support among truckers and motorists through groups such as the American Trucking Associations and AAA, which argue that highway privatization leads to higher toll rates (Bloomberg).
Chicago Aldermen Propose Changes to Infrastructure Trust
In an opinion piece in the Chicago Tribune, two of the Windy City’s aldermen state their general support of Mayor Rahm Emmanuel’s proposed Chicago Infrastructure Trust, which seeks to attract private investment for infrastructure projects. However, the aldermen also suggest significant modifications to the trust that would increase the city council’s control and require investors to comply with disclosure requirements for vendors doing business with Chicago. The Infrastructure Trust, and Chicago’s broad $7 billion infrastructure plan were the focus of this blog’s inaugural Policy Initiative Spotlight.
Infrastructure. Read more on how upgrading the nation’s aging network of roads, bridges, airports, railways, and water systems is essential to maintaining U.S. competitiveness.
Debt and Deficits
Almost Everyone Pays Taxes
The Hamilton Project, an economic policy initiative at the Brookings Institution, analyzed the claim that many Americans do not pay taxes. While only 54 percent of U.S. households paid federal income taxes in 2011, after accounting for all federal, state and local taxes, nearly everyone pays taxes. Even for federal taxes alone, the vast majority of Americans pay; the analysis found that of those aged 25 to 60—the core of the workforce—more than 80 percent pay either payroll or income taxes, and usually both.
As the United States continues to run budgets with high deficits, politicians debate different plans to reduce government costs and to raise revenue. This CFR Backgrounder by Jonathan Masters outlines the competing policy paths on federal fiscal reform, and the global consequences for failing to bring down U.S. debt.
Debt and deficits. Read more from experts on the challenges in reducing U.S. debt.
Education and Human Capital
Job Training Funds Falling
The New York Times reports that federal spending has fallen for job training and search services in inflation adjusted terms since 2006. Boosts to training programs under 2009’s stimulus act have expired. While extending unemployment benefits has attracted substantial political debate, funding for training has not
Education and human capital. Read more from experts discussing ways to improve U.S. education and immigration policies.
Steven J. Markovich holds an MBA from the University of Chicago’s Booth School of Business.