Corporate Finance in Verse – Real Time Economics

Pfizer Inc. said last week it would buy Allergan PLC in a deal worth $160 billion to slash its U.S. tax bill, rekindling a fierce political debate over the financial maneuver.
CATHAL MCNAUGHTON/REUTERS

Pfizer Inc.’s recent decision to escape the U.S. tax system by putting its legal headquarters in Ireland stoked another round of calls in Washington to revamp tax rules and protect the corporate tax base. It also inspired verse. Jessica Einhorn, a resident senior advisor at The Rock Creek Group in Washington and a former dean at Johns Hopkins University has previously mused on unemploymentbitcointhe Fed and central banking. Now add to that list corporate inversion:

Corporate Finance in Verse

Pretend that we could disappear from sight
While staying anchored locally, at once
Domestic in our creativity
Foreign in accounts and legal stance
Impossible you say cannot be done
A magic trick that teases like a pun

Just one such person can this feat proclaim
The corporate person legally exists
With form and content parted amiably
Inversion is the term of art today
For companies whose headquarters can claim
A passport which evades that taxing bane

We puzzle over productivity
Whose growth declines at rates we know portend
A fearful path for wages most of all
If corporations capital invest
They benefit depreciation wise
While labor needs security and health
The trust funds end up holding all our wealth

Alas those profits can be squandered some
where else, for share repurchases it flows
The logic favors allocating funds
To make investors feel enriched today
Tomorrow may be cheated by the mix
Whose clock forebodes that future as it ticks

Now Hillary proclaims she has the fix
Investors will be taxed for short term trades
Such patience brings our just reward some day
Although the linkage stretches tenuous
Better to deflect your proxy gaze
To say on pay another way to haze

It’s activists! I hear the ding-dong Dell
Who left the public for a private spell
He’s free to innovate and looks beyond
The niggardly concerns of daily marks
Beware all private firms are not alike
Some take on debt to get the profit spike

And here’s the final rub that trumps them all
The interest when we borrow we deduct
But equity no subsidy has earned
This recipe must augur future stress
Can infrastructure links help save the day?
Bipartisan support we won’t gainsay

Lower the rate to bring the money home
Then build a bridge for you and me alone
And call it corporate tax reform, shalom.

Related reading:

‘Is Unemployment Structurally Mocked?’

Bitcoin Gets Shakespearean

A Taper by Any Other Name…

Central Banking in Verse

 


 


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4 December 2015 | 12:04 pm – Source: blogs.wsj.com

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