Archive for June, 2010
Taxing Consequences
by Brad on Jun.21, 2010, under Economic Outlook
Once again we draw from an interesting opinion piece in the Wall Street Journal. This article was written by Arthur Laffer, and centers on the implications of changes to the tax code and the reporting of profits.
As with everything in life, investing is never to be considered in a vacuum. One of the most meaningful factors in investment considerations is the consequence of taxation. There’s no question that taxation can influence the behavior of the taxed… and some argue that therein lies the very purpose of taxation to begin with.
Mr. Laffer’s case, stated simply, is that the economy is presently benefitting from individuals and corporations shifting profits to the present to avoid heavier tax rates in the future, and that once that trend runs its course, corporate profits, and thus the economy, will suffer. It’s a bearish case, but certainly one that should be heard out.
