Better simpler, better together, better lower

High income taxes tend to discourage effort and entrepreneurship, while encouraging all manner of activity to avoid them. That is why a basic principle of good tax policy has long been to charge a low rate over a broad base.

In Britain, employment has risen by 1.3m in the past five years, but the number of taxpayers has fallen by 2.2m. More than 40% of American households pay no income tax. In contrast, the most highly paid 1% of workers in Britain pay 28% of all income tax, while in America it is 46%

The narrowing of the tax base, both personal and corporate, also reflects two failures of tax policy. The first is the proliferation of exemptions and deductions that go far beyond reasonable poverty-fighting policies. America is the most egregious offender. Its income tax (which contributes a bigger share of overall revenue than in other rich countries) is riddled with myriad deductions, from medical insurance to mortgage interest, which collectively cost a whopping 7% of GDP and mean that income tax is levied on a much narrower base than it could be. Other rich countries, from Italy to Australia, also have too many unnecessary deductions.

http://www.economist.com/news/leaders/21618784-taxes-are-best-raised-broad-base-many-countries-it-worryingly-narrow-too-reliant?fsrc=nlw|hig|18-09-2014|5356c450899249e1ccb3081a|

SAP buys into the cloud. The German business software giant acquired the online travel expenses company Concur for $8.3 B

SAP buys into the cloud.

The German business software giant acquired the online travel expenses company Concur for $8.3 B in an effort to expand its web services offerings to corporations. Seattle-based Concur is a rare survivor of the first dotcom boom

Founded in 1993 and taken public in 1998, Concur reported $546 million in revenue for the last full year, continuing a run of sharp sales increases. The company is on track to record $700 million in revenue this year

http://dealbook.nytimes.com/2014/09/18/sap-buys-concur-technologies-for-8-3-billion/?_php=true&_type=blogs&_r=0

The glittering power of cities for luxury growth

The glittering power of cities for luxury growth

The global economy is experiencing an unprecedented shift toward emerging-market cities. Here’s a road map of where luxury-goods companies should compete in the next decade.

http://www.mckinsey.com/insights/consumer_and_retail/The_glittering_power_of_cities_for_luxury_growth?cid=other-eml-alt-mip-mck-oth-1409

The MFSA (Malta Financial Services Authority) has published an updated Corporate Governance Manual for Directors

The MFSA (Malta Financial Services Authority) has published an updated Corporate Governance Manual for Directors of Investment Companies and Collective Investment Schemes. This revised Manual is updated with the  requirements of the Alternative Investment Fund Managers Directive (2011/61/EU).

The objective of this Manual is to increase awareness amongst Directors who are vital for the proper operation of investment companies and funds. The Manual also provides general guidance on the implementation of good governance in financial services.

MALTAway_balattiboardmember_NED_MFSA Corporate Governance Manual – Sept 2014

MALTAway_balattiboardmember_NED

Harvard Business School is ruining America. It’s uniquely responsible for the pay gap between CEOs and ordinary workers.

Harvard Business School is ruining America. It’s uniquely responsible for the pay gap between CEOs and ordinary workers.

The top tier pay scheme should be spread throughout the whole organization……or have shareholders inside your organization

Shareholders began to predominate over other stakeholders. And CEOs began to view their primary role as driving up share prices.

http://www.salon.com/2014/09/16/robert_reich_harvard_business_school_is_ruining_america_partner/?utm_source=facebook&utm_medium=socialflow

Credit may not drive economic growth. It’s a widely-held finance truism but nobody has ever proved it. Pleasure today means pain tomorrow.

Credit may not drive economic growth. It’s a widely-held finance truism but nobody has ever proved it.

Maybe credit is a follower, not a driver, of the boom-bust cycle. Maybe credit grows when the economy is growing, because of the need to finance investment, and shrinks when the economy is shrinking, because of the lack of investment. In retrospect, looking at a chart of credit growth vs. GDP growth, it might look like credit caused the cycle, but in fact it was just a passive tag-along. Maybe the cycle was caused by something else — productivity changes, or changes in monetary policy, or changes in people’s sentiment and animal spirits.

The academics have good reason for being skeptical. After all, production isn’t the same as consumption. In the example of me borrowing to buy a TV and car, my debt binge doesn’t make my salary — my production – go up at all. But in an economic boom, a country’s total production really does rise — that’s what fast growth means. In other words, if credit fuels economic booms, then it must do it in a fundamentally different way than the way it fuels a personal consumption binge.

Another reason academics are suspicious of the theory of credit-fueled growth is that when we talk about “credit” at the national level, we mean gross, not net. Most of the money that gets borrowed during a boom is borrowed from people in the same country . If taking on debt lets a borrower increase his consumption, why doesn’t making that loan force the lender to decrease his consumption? In other words, if credit is just one American lending to another, or one Chinese person lending to another, why does it boost growth?

http://www.bloombergview.com/articles/2014-09-16/credit-gets-you-a-tv-not-economic-growth

Braveheart Favors the EU

A fascinating and important change in Scottish attitudes that just thinking about independence appears to have produced — suddenly, they like and value the European Union a lot more

that's easy -- Europe. BEN STANSALL/AFP/Getty Images

2 things from this.

The first is that if you are a small nation of bit more than 5 million people, about to take a very large risk by heading out alone with uncertain currency, fiscal, resource and debt positions, EU membership offers continuity, reassurance and security. Scots who plan to vote for independence would naturally rethink the benefits of the EU and want to stay in it.

Second conclusion is that attitudes towards the EU are mostly to do with how people feel about their own, national situations, which are then projected onto the EU — and these sentiments can change quickly. Having promised Britons a referendum on staying in the EU by 2017, Prime Minister David Cameron has to hope for two things if he really does — as he says — want the U.K. to continue in the bloc.