Tag Archives: OECD

News, Politics, Government

How Does This Work, Obama To Cut Business Taxes By Increasing Business Tax Revenues

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By Tim Worstall, Contributor President Obama is giving a speech today in which he’ll propose a grand bargain to get America  working again. Sounds like a good idea so what’s the meat of it? Amazingly, it seems that the President is going to propose lowering business taxation while at the same time raising the amount of revenue coming from business taxation. Now if this was with reference to the Laffer Curve or one of the other theories about the undesirability of corporate and capital taxation in general (such as those of the Nobel Laureate Sir John Mirrlees) then it might not only be a plan but a good one. Unfortunately that doesn’t seem to be what is on offer. Obama long has called for a cut in corporate tax rates, but previously insisted such business tax reform be coupled with an individual tax overhaul. He’s dropping that demand and says instead that he’s open to the corporate tax cut that that businesses crave. OK, cutting the corporate tax rate, that’s a good idea. The statutory rate in the US is well above world and OECD average and can, depending upon how you want to look at it, be described as the world’s highest. But he wants it to be coupled with a significant investment on some sort of job creation program, such as manufacturing, infrastructure or community colleges. That will of course require some new amount of revenue. And even those various theories that say that a low or lower corporate tax rate will indeed grow the economy faster, thus in time producing higher tax revenue, those theories do say that this will take some time. So, in the short term, where are those extra revenues going to come from? The officials said money to pay for the jobs creation would come from a one-time revenue boost from measures such as changing depreciation rules or having a one-time fee on earnings held overseas. Either or both of those mean business paying more in tax than they do currently. And the extra “one-time boost” to revenues will necessarily be the extra amount that businesses will be paying in the future under this new proposal. …read more

Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

The OECD's International Tax Plan: The First Step On A Very Long Road

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By Howard Gleckman, Contributor Last week, the OECD proposed a major new initiative aimed at cracking down on tax avoidance by multinational corporations. The 40-page report follows widespread international criticism of aggressive tax planning by high-profile U.S.-based firms such as , , and . …read more

Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

G20 finance plan targets taxes from multinationals

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The finance chiefs of the world’s leading economies have announced an ambitious plan to help governments get more taxes from multinational companies.

The plan was designed by the Organization for Economic Cooperation and Development and introduced at a meeting of the Group of 20 finance ministers in Moscow on Friday.

The Paris-based OECD says that “national tax laws have not kept pace with the globalization of corporations and the digital economy, leaving gaps that can be exploited by multinational corporations to artificially reduce their taxes.”

The new 15-point plan includes ways to close loopholes, for example that allow companies to stash profits from in offshore subsidiaries.

Low tax payments by major multinationals have sparked public anger in Europe recently, especially as governments are struggling with high debts and low growth.

…read more

Source: FULL ARTICLE at Fox World News

News, Politics, Government

Major economies still struggling to create jobs

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Jobs growth remains weak among the world’s 20 biggest economies, where almost a third of the 93 million unemployed have been out of work for more than a year, top labor and development officials reported Wednesday.

In a batch of new figures intended to push G-20 governments into action, the U.N.’s International Labor Organization and the Organization for Economic Cooperation and Development warned the rate of employment growth remains low. The G-20 countries represent 80 percent of the world’s economic output.

Over the last 12 months, unemployment dropped slightly in half of the G-20 countries, but it rose among the other half.

It was highest, above 25 per cent, in South Africa and Spain. It was 11 percent or above in France, Italy and for the European Union as a whole, and above 7 percent in Britain, Canada, Turkey and the United States. Unemployment was below 5 percent in only four countries: China, India, Japan and South Korea.

Among the total unemployed, about 30 percent on average were jobless for over a year, the agencies said.

Youth unemployment rates were twice as high as those for adults in all G-20 nations but Germany and Japan and despite the wide use of subsidies to encourage hiring of young people in Britain, France, Italy, Saudi Arabia and Spain.

The weakness of the global economy even six years after the onset of the global financial crisis has “blunted” many countries’ efforts to find jobs for people, said Guy Ryder, the ILO director-general, and Angel Gurria, the OECD secretary-general, in a joint statement.

They advised labor ministers scheduled to begin two days of meetings on Thursday in Moscow that governments must ensure “a careful balancing between providing adequate income support for those out of work and with low incomes and activation measures which help them to find rewarding and productive jobs.”

…read more

Source: FULL ARTICLE at Fox World News

Business, Finance, Occupation & Industry

European Drop to Keep Global Demand for Oil in Check

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By Justin Loiseau, The Motley Fool

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2013 is expected to be the third consecutive year of weak growth in global oil demand, according to the International Energy Agency’s (IEA) April Oil Market Report, a summary of which was released today.

The IEA highlighted what it anticipates will be the sharpest drop in European demand since 1985.

Worldwide, the IEA expects demand to increase by just 795,000 barrels per day (bpd) in 2013. Countries outside the Organisation for Economic Co-operation and Development are predicted to drive growth with an additional 1.28 million-bpd demand, but a 480,000-bpd drop in OECD consumption will offset almost 40% of that gain in demand. In Europe, demand is expected to drop by 340,000 bpd, the weakest level since 1985.

On the other side of demand, the IEA expects non-OPEC supplies to increase 1.1 million bpd, driven largely by renewed exports from South Sudan. Although the IEA‘s press release does not list 2013 expectations for OPEC oil supplies, it does note that March supplies dropped 140,000 bpd due to disruptions in Nigeria, Libya, and Iraq.

The article European Drop to Keep Global Demand for Oil in Check originally appeared on Fool.com.

Y
ou can follow Justin Loiseau on Twitter @TMFJLo and on Motley Fool CAPS @TMFJLo.
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From: http://www.dailyfinance.com/2013/04/11/european-drop-to-keep-global-demand-for-oil-in-che/

Business, Finance, Occupation & Industry

Dow May Open Higher After Alcoa Beats the Street

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By Roland Head, The Motley Fool

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LONDON — Stock index futures at 7 a.m. EDT indicate that the Dow Jones Industrial Average may open 12 points higher this morning, while the S&P 500 may open up by 0.19%.

Markets in Europe edged higher this morning after U.S. aluminum giant Alcoa beat earnings forecasts and China reported that inflation fell further than expected in March, boosting hopes that the Chinese government will continue its monetary-stimulus efforts. Among the biggest risers were mining shares, which helped lift the FTSE 100 by 0.47% by 7:20 a.m. EDT. In Europe, a new OECD report sounded a warning that Slovenia could soon follow Cyprus into bankruptcy if its banking sector is not recapitalized. In the U.K., new figures showed that exports fell by 2.8% in February, while industrial output rose by 1%. German exports also fell: Exports from Europe‘s biggest economy were down by 1.5% in February, while imports fell by 3.8%.

Today’s U.S. economic reports include the NFIB small-business index for March, which fell from 90.8 in February to 89.5, slightly ahead of expectations of 89.2. At 10 a.m. EDT, wholesale inventories are expected to have risen by 0.6% in February after gaining 1.2% in January. February’s Job Openings and Labor Turnover Survey is also due at 10 a.m. EDT.

Last night Alcoa reported first-quarter adjusted earnings of $0.11 per share on sales of $5.83 billion, beating analysts’ expectations for adjusted earnings of $0.08 per share but missing the $5.88 billion consensus forecast for revenue. Alcoa is widely seen as a predictor for the wider market, and despite the revenue miss, these results have been seen as a ‘beat’ and raised hopes that corporate earnings will be stronger than expected across the S&P 500.

Other stocks that may be actively traded today include J.C. Penney. The retailer’s shares were 8.66% lower in premarket trading this morning after the company announced last night that CEO Ron Johnson will leave the company after less than two years in the post to be replaced by his predecessor, Mike Ullman. J.C. Penney’s stock price has halved since former Apple exec Johnson took control, and his turnaround plan is now widely seen as a failure that has alienated loyal customers without attracting new ones. Iron ore miner Cliffs Natural Resources was also higher in premarket trading following gains for commodity stocks in Europe.

Finally, let’s not forget that the Dow’s daily movements can add up to serious long-term gains. Indeed, Warren Buffett recently wrote, “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.” If you, like Buffett, are convinced of the long-term power of the Dow, you should read “5 Stocks To Retire On.” Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation report.

The article Dow May Open Higher After Alcoa Beats the Street originally …read more

Source: FULL ARTICLE at DailyFinance

News, Politics, Government

Stock Market Logic

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By Pamela Rosenau, Contributor “If you knew what was going to happen in the economy, you still wouldn’t necessarily know what was going to happen in the stock market.”  Warren Buffett’s quote argues that there is a weak correlation between the performance of the economy and equity markets.  Essentially, even if economic forecasters could make accurate predictions, it wouldn’t really help your portfolio.  In fact, an analysis by Ned Davis Research has found that the correlation between GDP and the S&P 500 is rather low.  Although many have seen the stock market as a good “predictor” of the economy, the correlation is even worse (actually slightly negative) when adjusting real GDP ahead two quarters, which defies this “stock market logic.”  According to Ned Davis, this suggests that stocks are “more likely to go in the opposite direction” of GDP.  Although many may want an accelerating economy, it may also “mean less Fed liquidity”, whereas a decelerating economy may encourage more Fed easing.  Market strategist Barry Ritholtz recently stated that “even though more than half of the 41 OECD nations are currently in a recession, the present cyclical bull market dating back to March 2009 is the sixth-best rally since 1929.”  The Economist also noted that “this rally in the Dow has been accompanied by the weakest GDP growth of all the bull markets since the second world war.”  According to Strategas Research, “more than 40% of the time over the last 62 years, stock prices and earnings have moved in opposite directions in any given year.”  Again, the economy is not driving this equity bull market – a market that continues to show its strong legs.  As Paul Lim of the New York Times recently wrote, certain characteristics tend to surface when the stock market is near a peak.  For example, “unemployment tends to fall below 5 percent, as companies race to hire; around 60 percent of investors say they are “bullish,” according to sentiment surveys; and the price-to-earnings ratio for the Standard & Poor’s 500-stock index jumps above 18.”  However, as Lim notes, U.S. unemployment is at 7.7 percent, the AAII survey shows less than 40 percent are bullish, and the trailing P/E ratio is below 16x.  Needless to say, we have not hit levels of overconfidence that are typically inherent near a stock market peak.  Furthermore, although money flows into equity funds have improved this year, bond funds are still enjoying inflows, a reflection of how investors have not fully rekindled their love with stocks.  …read more
Source: FULL ARTICLE at Forbes Latest

Business, Finance, Occupation & Industry

3 Companies That Could Save America From $250 Oil

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By Tyler Crowe, The Motley Fool

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Despite increased oil production in the U.S. from unconventional sources such as the Bakken and Eagle Ford shales, oil prices haven’t gone down. In fact, the price for a barrel of West Texas Intermediate crude is at about $93 and climbing. What’s even worse is that one international group believes that the price of oil is poised to go up — way up.

Who is proclaiming this bad news? The Organization of Economic Cooperation and Development, or OECD. Based on its models, a barrel of oil could be in the range of $150 to $270 by the end of the decade. Let’s look at why they could be right and how we could avoid the sting of surging oil prices.

Why they could be right
Despite the large increase in domestic production, it costs more to access these new sources, and demand is still outpacing supply. According to EIA, demand for oil was about 1 million barrels per day higher than supply in 2011, and the projections for global demand are expected to continue to climb, thanks in large part to two countries: China and India.

On a worldwide proven-reserve basis, China and India are not well endowed, nor do they have a copious amount of deposits. Collectively, the two countries have only about 20.4 billion barrels of proven reserves, or about 1.3% of the world’s total supply. Also, a few weeks ago, the U.S. Department of Energy reported that China had surpassed the U.S. as the world’s largest importer of oil. From a raw numbers perspective, India doesn’t hold a candle to China, but it still imports about 80% of its oil needs. With China and India — the two most populous countries in the world — growing GDP at roughly 8% and 6% annually, demand will more than likely skyrocket.

Why they could be wrong
Models are great, and they can give a decent window into the future — if the correct assumptions are made. The OECD admits that these projections could be thrown off by two things: a slowing of global GDP, and the potential for oil substitutes to capture market share. Obviously, a slowing economy would put a dent in oil demand, but growing oil prices could be what brings GDP down as well. According to the IMF, imbalances in oil supply and demand could affect global GDP growth by as much as 1% annually — a bit of a Catch-22.

With oil potentially getting that expensive, we need to seriously consider the potential of seeing another energy source replace oil demand. In the past 23 years, gasoline prices and the price for a barrel of West Texas intermediate in the U.S. have traded at a multiple of roughly 33.1. Based on the OECD‘s projections, this could mean that gasoline in the U.S. would cost somewhere in the range of $6.05 to $10.85. With current prices already causing a consideration of alternative fuels, $10 a gallon certainly would tip the scales …read more
Source: FULL ARTICLE at DailyFinance

News, Politics, Government

Asia's Week: Another Wild One on China's Business Frontier

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By Tim Ferguson, Forbes Staff

China is not a member of a fraternity of nations known as the OECD (Organization for Economic Cooperation and Development), maybe because this is a group whose basis is liberalization. But the OECD continues to take a shine to China, pronouncing this week that all looks fine for a healthy rebound on the mainland in 2013. This may, in fact, be its view looking forward 50 years, if an earlier report in the China Daily was accurate. …read more
Source: FULL ARTICLE at Forbes Latest

Business, Finance, Occupation & Industry

OECD: China Will Soon Have World's Largest Economy

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By Tim Brugger, The Motley Fool

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The Chinese economy, having already surpassed the euro area, will overtake the U.S. and become the largest economy in the world by 2016, after allowing for price differences, according to a recently released study conducted by the Organisation of Economic Cooperation and Development (OECD).

Though China‘s economic growth slowed in 2011 and 2012 after years of making significant economic strides, the OECD expects that “policy easing and a pick-up in infrastructure spending” will stimulate the region’s economy. Further, the OECD cites China‘s recent slowdown as a contributing factor to lower inflation, which in turn will help drive future growth.

Reforms in China‘s financial sectors, primarily the easing of government-imposed monetary restrictions, will continue to be beneficial to the area, according to the report. Increased productivity as a result of an improved competitive environment, along with Chinese citizens’ continued migration to large, industrial cities, will also play important roles in fueling the country’s economic growth.

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The article OECD: China Will Soon Have World’s Largest Economy originally appeared on Fool.com.

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Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Why This Railroad's a Great Bet for the Long Haul

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By Isaac Pino, CPA, The Motley Fool

CSX Domestic Utility Coal

Filed under:

Railroad stocks traditionally perform on-par with the economy: Periods of robust economic growth deliver attractive returns for railroads, and vise versa. For decades, this market-matching performance coupled with poor industry economics explained Warren Buffett‘s tendency to ignore the railroad sector altogether.

In more recent years, however, Buffett’s experienced a change of heart, and it’s not due to nostalgia for the bygone era of railroads. He sees a dynamic and profitable future for all of the major players, which could result in market-beating performance across the industry. This trend has already taken root and looks poised to continue due to steady long-term U.S. economic growth, a need for low-cost long-haul transportation of goods, and a rail infrastructure that remains the envy of the rest of the world. 

For investors, the door remains wide open for investment in rail, and CSX , the largest East Coast operator, presents an attractive opportunity. To provide investors with further insight into CSX, we recently published an in-depth premium report that evaluates every aspect of the company from strategy to leadership to valuation. Today, you can get a sneak peak into this report and see just how CSX can use its valuable assets to deliver strong returns for shareholders in the years to come:

In May 2012, the International Energy Agency, a leading global alliance and research body, proclaimed the next few decades “the golden age of natural gas.” The IEA predicted this clean-burning commodity will replace coal as the second-largest energy source in the world. As this shift rapidly takes shape in the U.S., especially among utility companies, financial pundits have proclaimed the end of the coal era as a major roadblock for certain railroad companies. What the pundits are missing, however, are a few noteworthy trends.

Coal’s recent unpopularity in the U.S. might be temporary as natural gas prices rebound from their current rock-bottom levels. At the same time, coal is still a highly valued resource around the world, particularly in developing countries in Europe and Asia. These areas of the world have less immediately available natural gas resources, and thus any transition away from coal would take decades, not years, to play out. Let’s compare the two trends taking shape currently in the most important coal markets.

For CSX, America’s utility coal demand has steadily declined from its peak of 162 tons in 2006. During this time, many older, less efficient coal plants have been idled, and even the well-run plants have been forced to stockpile coal due to plunging natural gas prices.

In the meantime, the U.S. is emerging as a prime supplier of coal globally. As developed countries transition to cleaner fuels, the rapidly rising non-OECD countries in Asia, Eastern Europe, and Africa will drive the majority of growth in demand for coal.

World Coal Consumption by Region, 1980-2035

The long-term story of coal demand is quite different from the immediate repercussions of the U.S. decline. In the last five years, CSX‘s coal export loads have …read more
Source: FULL ARTICLE at DailyFinance